SMC consolidates food, beverage units

MANILA, Philippines — San Miguel Corp. is consolidating its food and beverage businesses into San Miguel Pure Foods Co. which will be renamed as San Miguel Food and Beverage Inc.

This will be done through a P336 billion swap of SMC’s shares in beer and other beverage business.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, SMC shall subscribe to 4.24 billion additional common shares of Purefoods.

The common shares will be issued by Purefoods from the increase in its  authorized capital.

As full payment for the transaction, SMC will transfer its 7.85 billion common shares in beer subsidiary San Miguel Brewery Inc. and 216.9 million common shares of Ginebra San Miguel Inc. to Purefoods.

However, SMC said it would have to file before the Bureau of Internal Revenue (BIR) a request for a tax-free ruling relating to the exchange by the company of SMB and Ginebra common shares for the new shares of Purefoods.

SMC and Purefoods will notify the Philippine Competition Commission (PCC), the government’s anti-trust body, of the transaction and the non-application of the requirement to obtain PCC approval to proceed with the transaction.

The conglomerate will likewise obtain the approval of the Securities and Exchange Commission and the Philippine Stock Exchange related to the listing by Purefoods of the new shares.

As part of the transaction, Purefoods is amending the company’s primary purpose to include engagement in the alcoholic and non-alcoholic beverage business.

After SEC approval, Purefoods’ authorized capital stock will be increased to P12 billion divided into 11.6 billion common shares with a par value of P1 per share and 40 million preferred shares with a par value of P10 per share.

“From the increase in authorized capital stock, approximately 44 percent therefore or 4.24 billion common shares with a par value of P1 per share shall be subscribed by SMC,” Purefoods said.

Purefoods will hold a special stockholders meeting for the approval of the amendments to the articles of incorporation and the share swap transaction on Jan. 18, 2018.