Philippine firm eyes Saigon Beer stake
Philippine firm eyes Saigon Beer stake
San Miguel, Philippines’ largest brewery corporation, is “evaluating and may bid” for Viet Nam’s Saigon Beer Alcohol Beverage Corp (SABECO), company president Ramon Ang told Bloomberg reporters last Friday.
Viet Nam may provide an anchor to increase its brewery business as consumption in the country is growing at an annual rate of at least 10 per cent, five times that in the Philippines, he said, adding that his company sells nine of every 10 beers in the Philippines.
“The businesses we ventured into have matured, therefore the company is in a very stable position,” Ang said, citing compounded annual 20 per cent growth in recurring profit and a near fourfold increase in assets since 2008 following San Miguel’s diversification from food and drinks into non-allied industries such as toll roads and resources. Excluding one-off items, profit will rise at least 20 per cent to some 60 billion pesos (US$1.2 billion) this year, he said.
The company plans to invest $34 billion in an oil refinery, an integrated steel complex and an ocean-tide power plant as the Philippines’ largest company by sales expands amid forecasts for robust economic growth in the country, according to its president.
Saigon Beer or SABECO, Viet Nam’s largest brewer with 40 per cent market share, has received Government approval to hire consultants to advise the State-owned company on its planned stake sale this year. Heineken NV, Anheuser-Busch InBev NV and Asahi Group Holdings Ltd are among seven foreign companies that previously registered to bid for stake.
An initial public offering of San Miguel’s unit SMC Global Power Holdings Corp may push through in the third quarter, Ang said, declining to provide further details. In January 2014, as much as $1 billion was raised from a maiden-share sale of up to 49 per cent of the unit, which owns San Miguel’s power-plant ventures, Ang said.
Ang’s expansion outside of food and drinks did not immediately boost San Miguel’s share performance, which has trailed the benchmark Philippine Stock Exchange Index since he was named president in 2002. While the stock has gained 13 per cent this year after rallying 85 per cent in 2016, boosted in part by a windfall from the sale of its telecom assets, San Miguel has underperformed relative to the index in six of the 10 years since 2007, when Ang obtained shareholders approval to expand into non-allied industries. The benchmark index has gained almost 7 per cent this year after losing 1.6 per cent in 2016.
