San Miguel completes acquisition of international brewing unit for $300 million

MANILA, Philippines - San Miguel Brewery Inc. (SMB), the flagship domestic brewery firm of diversifying conglomerate San Miguel Corp., said yesterday it has completed the acquisition of the international beer business of its parent firm.

SMB acquired 100 percent of San Miguel Brewing International Ltd. for $300 million.

San Miguel is consolidating its brewery operations in its core unit so it can focus on new investments in infrastructure to propel growth.

SMB president Roberto Huang earlier said the acquisition would allow the company to expand its footprint to a bigger and broader platform in Southeast Asia and China, and potential access to its Japanese partner Kirin’s platform in other developed and emerging markets in Asia.

The Royal Bank of Scotland was San Miguel’s sole financial adviser for the transaction while ING acted as an independent financial adviser for SMB.

SMB is 43.25 percent owned by Kirin, Japan’s second largest brewery after acquiring 665.02 million shares held by San Miguel for P58.9 billion or P8.841 each share.

SMB, which corners 95 percent of the Philippine beer market, produces and markets San Miguel Pale Pilsen, Red Horse, San Mig Light and five other affiliated brands.

To ensure continued growth, SMB will expand its coverage in areas that are currently underserved. It also intends to take advantage of growing consumption in rapidly-urbanizing areas outside Metro Manila.

Instead of just looking at the beer segment, SMB is hoping to capture a larger share of the total alcoholic beverage segment as Red Horse is being positioned to attract more hard liquor consumers, thereby increasing its slice of the market.

SMB successfully completed last year a record-breaking P38.8-billion bond issue – the largest debt offering by a corporate issuer in the country proceeds of which were used to purchase the domestic beer brand and brewery land assets from San Miguel.