The board of San Miguel, the Philippines“ largest food and beverage conglomerate by sales, approved on 8 May 2007 the divestment of San Miguel“s domestic beer and regional packaging operations in pr…
The board of San Miguel, the Philippines“ largest food and beverage conglomerate by sales, approved on 8 May 2007 the divestment of San Miguel“s domestic beer and regional packaging operations in preparation for their initial public offering. Group operating income in the 1Q 2007 was down 24% to PHP 3.8 billion, in part because of poor performance at the packaging division. San Miguel Chairman Eduardo Cojuangco said in a statement that the transformation of the company“s investment portfolio is part of moves to “create more value for our shareholders”. Sales in the 1Q 2007 at the packaging operations fell 16% year-on-year to PHP 4.60 billion, while sales at its domestic beer operations declined 1% on year to PHP 10.5 billion. The spin-off was also undertaken to help these market-leading divisions. “This will provide both the beer and packaging business the financial flexibility and operating muscle that will boost operations moving forward”, said Ramon Ang, president and chief operating officer of San Miguel, in a statement. “We are looking to unlock the potential and underlying value of the entire San Miguel Group”, added Mr. Ang. San Miguel said its board also allowed domestic beer operations to enter a strategic partnership with Japan“s Kirin Brewery Co. which holds a 20% stake in San Miguel. It is not clear whether San Miguel will sell a stake in the beer operations to Kirin, the strategy it adopted in April 2007 when it sold a 35% interest in its regional packaging operations to Japan“s Nihon Yamamura Glass Co. Ltd. San Miguel and Nihon Yamamura are already joint venture partners in other packaging ventures.