MANILA, Philippines – San Miguel Corporation (SMC), the country's most diversified conglomerate, is set to consolidate all of its food and beverage businesses under one unit through a P336.35-billion share swap deal.
The Ramon Ang-led conglomerate told the Philippine Stock Exchange (PSE) on Monday, November 6, that its subsidiary San Miguel Pure Foods Company Incorporated will be called San Miguel Food and Beverage Incorporated.
San Miguel Pure Foods' primary purpose will then be expanded to engagement in the alcoholic and non-alcoholic beverage business. This is in line with the conglomerate's consolidation of its traditional businesses.
To move forward with the consolidation, San Miguel Pure Foods will acquire 7.86 billion shares in San Miguel Brewery and 216.97 million shares in Ginebra San Miguel from SMC.
San Miguel Pure Foods will then issue 4.24 billion shares to parent firm SMC. (READ: Meet Ramon Ang, Filipino billionaire and Duterte's friend)
A share swap happens when the target company's shares are exchanged for shares of the acquiring firm as part of a merger or acquisition.
Under the transaction, San Miguel Pure Foods will cut the par value of its common shares to P1 apiece, from P10. The subsidiary will also increase its authorized capital to P12 billion, from P2.46 billion.
Shares of San Miguel Pure Foods surged by 50% to P462 apiece on Monday, after the announcement on the consolidation of the food and beverage businesses.
SMC shares also went up by 5.43% to P106.80 on Monday. (READ: San Miguel's P1-trillion petrochem facility to break ground by end-2017)
This was after the PSE approved SMC's request for a voluntary trading halt of its securities from 9 am to 10 am on Monday.
SMC appointed Standard Chartered Bank as transaction advisor and ING Bank NV as independent financial advisor for the share swap transaction.
A tender offer will also be conducted for San Miguel Brewery and Ginebra San Miguel common shares held by minority shareholders.
San Miguel will have to notify and seek the approval of the Philippine Competition Commission (PCC) for the share swap transaction.
During the 1st two quarters of 2017, the net income of Ginebra San Miguel surged by 92% to P265 million, from P138 million in 2016, as net sales climbed 20% to P10.12 billion.
San Miguel Pure Foods, meanwhile, delivered P3.1 billion in net profit during the 1st half of the year, up 26% from a year ago. Its net sales inched up by 5% to P55.9 billion. – Rappler.com