SMC sells assets to fund diversifications
The food and beverage giant San Miguel Corp. is looking to sell a minority stake in its food, hard liquor, international beer and packaging units. SMC plans to sell its assets in its effort to raise $600 million, the proceeds of which will be used to its new ventures which are outside its traditional businesses.
The conglomerate has started diversifying into the power business. Last October, it bought out the 27% stake of the state-owned Government Service Insurance System (GSIS) at Meralco, giving it an influential voting bloc.
Recently, it gained a foothold in the lucrative power generation business by over the 620-MW Limay diesel-run power plant and the contract to manage the 1,000-MW Sual coal-fired power plant in Pangasinan.
SMC also has an option to buy a majority stake in the country’s biggest oil refiner Petron Corp.
Company spokesperson Ferdinand Constantino said they will be selling its stake in San Miguel Pure Foods Co. Inc., Ginebra San Miguel and in its packaging and international beer operations, where it expects to collectively generate $600 million. This will be used to fund the company’s diversification.
For its interests at Pure Foods, SMC is in talks with Minnesota-based Hormel Foods Corp. and three other interested investors on the potential sale of up to 49% stake. For Ginebra San Miguel, it is likewise in negotiations with other foreign partners as potential partners on strategic investments.
Aside from its recent acquisitions, Constantino said they are still continuing to scout for new ventures. He said SMC was “evaluating a possible investment in the mining industry for the development and exploration of new gold and copper mine in the southern Mindanao region which has an estimated ROE (return of equity) of 20 percent.â€
September 19, 2009
Tags: asset sale, business news, diversification, Ginebra, GSIS, Philippine, Pure Foods, SMC Posted in: Corporations, Philippine business news, investments
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