Word is going around the stock market that San Miguel Corp. firmed up last week another big acquisition in the energy sector.

San Miguel and the Bakrie group of Indonesia signed an agreement on San Miguel’s 51-percent acquisition of the Bakrie group’s PT Bumi Resources.

My info is that Bakrie needed the cash to pay its debts. The question is, how was San Miguel able to get first crack at such a highly profitable coal mining company?

It seems that San Miguel’s street-smart president and chief operating officer, Ramon S. Ang, has been a longtime friend of the one of the Bakrie brothers.

The Bakrie group—a highly diversified conglomerate that is into, well, everything—is said to account for roughly 35 percent of the market capitalization of the Indonesian Stock Exchange.

And so, how significant is the newest San Miguel acquisition of the controlling interest in Bumi? I mean, what is it to the guys down here in my neighborhood?

For one, Bumi is at the center of the coal mining industry in Indonesia, being the largest coal company there, with proven coal reserves of more than a billion tons.

It is not a surprise, therefore, that its so-called EBIDTA (earnings before interest, taxes, depreciation and amortization), a measure of the profitability of a business, amounts to about $1 billion a year.

That’s even bigger than the EBITDA of San Miguel today, or after it unloaded its billion-dollar investment in Australia.

Various reports also placed the coal exports of PT Bumi Resources at about 55 million tons a year.

In comparison, the total coal imports of the Philippines last year reached only 11 million tons. It’s that kind of “big!”

I mean, San Miguel can eventually provide all of the coal that this country will ever need now and forever. Amen.

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Together with its other acquisitions of energy related businesses, San Miguel may yet turn out to be the country’s largest energy company.

I am not sure if beer and diesel mix well, but reports said that San Miguel had also acquired 51 percent of oil refiner and retailer Petron Corp.

In addition, news headlines recently screamed about San Miguel’s purchase of the shareholdings of the Government Service Insurance System (GSIS) in the Lopez group’s power retailer Manila Electric Co. (Meralco).

Word has it that San Miguel now owns more than 40 percent of the country’s biggest power distribution company, which is even more than the total holdings of the Lopez group.

At the stock market nowadays, you can hear different analyses (i.e., wild guesses) regarding San Miguel’s entry into Meralco.

I myself heard two opposing views—i.e., that San Miguel paid too much for the GSIS holdings in Meralco, or that San Miguel got them for a song.

It all depends on which side (either the Lopez group or the GSIS) is financing the analysis.

Under the “overpriced” scenario, San Miguel was actually helping the Lopez group get rid of the troublesome GSIS out of Meralco.

In other words, San Miguel is going to be, well, “friendly” with the Lopez group.

That’s why San Miguel had to bite the supposed “high” price for the GSIS holdings. Otherwise, GSIS would not have gone along with the plan, right?

In the “under-priced” view, meaning, that San Miguel had a good bargain, San Miguel should now be the ally of the government in booting the Lopez group out of Meralco.

That should be the “hidden price” in its bargain acquisition of the GSIS holdings in Meralco.

Which version should we believe? Well, I guess, none of the above!

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San Miguel bought the GSIS holdings in Meralco for no other reason than for the benefit of San Miguel. You know, its stockholders!

Look, like all other energy-related businesses, Meralco (not to mention Petron and Bumi) would provide a much higher return than San Miguel’s food and beverage businesses.

Each of those San Miguel acquisitions in the energy business has more than 20-percent ROE, or return on equity. They are, in other words, highly profitable.

And so, do you still think San Miguel and the Lopez group will engage in a nasty media quarrel over Meralco?

I mean, if you look at the record of Ramon Ang in San Miguel, which posted almost 30-percent increase in profits every year during his time, do you think he is the kind of businessman to engage in time-consuming, useless quarrels?

Let me remind you of the Sumilao land reform controversy. Instead of San Miguel fighting the farmers in court, thus spending tons of money on PR and political favors, Ramon Ang simply spent P28 million to acquire the land that San Miguel eventually gave away to the same farmers. The reason behind this is that San Miguel could have spent more than P28 million in a prolonged court case.

Ramon Ang, in other words, does not let emotion get in the way of making business decisions.

And so, I doubt if he will figure in a fight against the Lopezes to serve the best interest of San Miguel. Simply, San Miguel bought into Meralco to make money.

But, hopefully, it does not mean that the issue of transparency in Meralco will soon be forgotten.