San Miguel may battle with Asahi, Kirin over Vietnam brewer Sabeco

MANILA, Philippines – San Miguel Corporation (SMC) may go head-to-head with Japan's Asahi Group Holdings and Kirin Holdings as these companies have expressed interest to bid for a majority stake in Saigon Alcohol Beer and Beverages Corporation (Sabeco), the leading beer producer in Vietnam.

SMC confirmed to the local bourse on Monday, April 3, that it will participate in the public bidding for the sale of an 89.59% stake in Sabeco, which will be conducted by the Vietnamese government.

"San Miguel will participate in the bidding," SMC corporate information officer Ferdinand Constantino said in the disclosure.

But SMC is not the only brewer that has set its sights on Sabeco. Nikkei Asian Review reported that Asahi and Kirin are also interested.

The Vietnamese government owns an 89.6% interest in Sabeco, and 82% in Hanoi Beer Alcohol Beverage (Habeco). Nikkei Asian Review said the two breweries control roughly 60% of Vietnam's beer market.

The Vietnamese government plans to unload its entire holdings in the two beer firms by end-2017.

SMC's beer unit San Miguel Brewery Incorporated posted a 31% hike in 2016 net income to P17.6 billion, as sales increased by 18% to P97.1 billion.

Another unit, Ginebra San Miguel Incorporated, also booked P361 million in net income, a sharp reversal from the P386-million net loss recorded in 2016. Sales also grew 12% in 2016 to P18.5 billion.

Based on projections, Constantino said SMC expects net income to rise by 20% to about P60 billion in 2017.

Other than a stake in Sabeco, Constantino said the conglomerate is also evaluating the viability of investments in the following business ventures: