SMC to acquire majority stake in Petron

San Miguel Corp., Southeast Asia’s largest food and beverage conglomerate, has clinched a deal with London-based fund manager Ashmore Group to acquire a controlling stake in oil refiner Petron Corp., a top San Miguel official said yesterday.

When The STAR asked if the company has reached an agreement with the Ashmore Group to acquire a 50.1-percent interest in the country’s largest oil firm San Miguel president Ramon S. Ang replied in a mobile text message: “Yes.”

Ang, however, did not disclose details such as the acquisition price and terms of the agreement that will allow San Miguel to become the single biggest shareholder of Petron.

In a late disclosure to the Philippine Stock Exchange yesterday, San Miguel’s corporate information officer Ferdinand Constantino said the company’s board has authorized management “to enbter into an option agreement with Ashmore Group for the purchase of up to 50.1 percent stake of Ashmore’s interest in Petron Corp.”

This came amid reports the Ashmore Group has agreed to acquire the government’s remaining 40-percent interest in the oil firm at P6.85 each share, which would bring its total shareholdings in Petron to 90.57 percent.

Industry sources said San Miguel would acquire the 51-percent stake at the same price of P6.85 per share.  

Ashmore acquired its initial 40- percent stake in Petron from Saudi Aramco for $550 million, or for P6.531 per share. It bought an additional 10.57 percent in Petron through a tender offer to minority investors at the same price in compliance with securities laws.

Petron operates a 180,000-barrel-a-day refinery and supplies nearly 40 percent of the country’s oil requirements. It also has more than 1,250 service stations, the largest network in the Philippines.

As this developed, San Miguel said its board has approved a plan to venture into the wireless broadband business.

In a statement issued yesterday, San Miguel said its board of directors gave management the green light to pursue a joint venture deal with Qatar Telecom QSC to look into opportunities in the wireless broadband, mobile and mobile broadband businesses in the Philippines.   

QTel is an integrated Telecommunications player based in Qatar, operating either GSM or WiMax services in 16 countries with a population coverage of 550 million, and a subscriber base of 55 million. It is majority owned by the State of Qatar.   

San Miguel said the Filipino consumer will be the ultimate beneficiary of its intended investments since customers will now have access to a reliable service provider offering affordable high-speed wireless broadband and communication solutions.

QTel envisions itself to be among the top 20 telecom companies in the world. It recently completed the acquisition of the second largest mobile operator in Indonesia for US$1.8 billion. Through its Wi-Tribe brand, the company has successfully introduced high speed broadband wireless services in a number of emerging markets.

Ang earlier said San Miguel had enough resources to fund its recent acquisitions, which include power utility giant Manila Electric Co. and Petron, having sold its Australian assets.    

Analysts said San Miguel may have a cash hoard of between $1 billion to $3 billion following its string of asset disposals which included Australian dairy maker National Foods Ltd. which it sold for $2.6 billion to Japanese brewer Kirin Holdings, and its 35 percent stake in its packaging unit.   San Miguel raised $130 million from the sale of some of its shareholdings in its packaging unit to Japan’s Nihon Yamamura Glass. It also sold its 29.4 percent stake in unlisted property firm KSA Realty for P1.8 billion pesos to Shang Properties Inc.