MANILA, Philippines?Beverage, food and packaging group San Miguel Corp. has joined the queue of suitors interested in acquiring the country?s largest and most profitable insurer, Philippine American Life and General Insurance Co. (Philamlife).

?San Miguel will listen to any good deal,? SMC vice chairman and president Ramon Ang told the Philippine Daily Inquirer on Thursday, when asked about the company?s possible bid for Philamlife.

Industry sources earlier said Philamlife had caught Ang?s eye as soon as news broke out that the insurer?s parent firm, the American International Group (AIG), had been rocked by cash woes as a result of the financial meltdown in the United States. AIG later had to get an $85-billion lifeline from the Reserve Bank of New York.

SMC is the fourth local group to officially express interest in AIG?s crown jewel in the Philippines, after the Yuchengco group, the Ayala group and the state-run pension fund Government Service and Insurance System.

SMC is diversifying from its traditional businesses. Its financial advisor, Goldman Sachs, has suggested that it invest in new high-growth businesses, such as power generation or transmission, public utilities, mining, and infrastructure.

SMC has said it is seriously considering investing as much as P35 billion, or roughly $70 million, to develop new engines of growth to further augment the gains it had made with its current core businesses.

The San Miguel group had cash assets of P105.2 billion ($2.2 billion) as of June 30, 2008. It also has an interest in Bank of Commerce.

Acquisition of Philamlife would allow SMC to venture into insurance and fund management, AND also preserve the bulk of the Philamlife workforce, which might be affected if another insurance group were to acquire Philamlife.

AIG has set three criteria for Philamlife?s buyer: It has to have a strong, reputable brand name; it has to be financially sound; and it has to fit Philamlife?s employees and stakeholders into its strategic plans while sustaining Philamlife?s growth potential.

Philamlife has about P143 billion worth of insurance contracts with over one million policyholders in the Philippines. It has 1,500 employees, a net worth estimated at P21 billion, and P108 billion in assets. Including subsidiaries and affiliates, it has consolidated assets of P170 billion and a consolidated net worth of P49.5 billion.

For SMC, this is a rare chance for entering a new field as a dominant market player right away, Eric Claudio of Pentacapital group?s Intra-Invest Securities Inc. noted.

?It makes sense for SMC,? Claudio said. ?But it will all boil down to price. The other criteria will be secondary.?

AIG reported has an initial asking price of $2 billion?about P95 billion?for the Philamlife group.

Claudio said it was uncertain whether Philamlife could fetch that price, which is double its book value of $1 billion. ?Nowadays, it?s hard to get a premium, unless there?s justification,? he said.

AIG?s financial advisors for its global asset sale are JP Morgan and The Blackstone Group.

The sale of Philamlife is likely to be the country?s biggest corporate deal since Banco de Oro Unibank took over Equitable PCI Bank in 2006. Edited by INQUIRER.net