JG Summit strikes deal to buy SMC’s Meralco stake

MANILA, Philippines–The Gokongwei group has struck a deal to buy shares in Manila Electric Co., the country’s largest power distribution firm, held by conglomerate San Miguel Corp. and its subsidiaries.

In separate disclosures to the Philippine Stock Exchange on Monday, SMC and the Gokongweis’ flagship holding firm JG Summit Holdings Inc. said they have agreed on the transaction subject to closing conditions mutually agreed upon by parties. None of the terms was disclosed.

The SMC group has 27.1-percent stake in remaining stake in Meralco valued by the market at about P83.7 billion based on Monday’s trade.

SMC said it had mandated Credit Suisse as its sole financial adviser for the transaction.  The conglomerate said it’s selling its stake together with those held by units San Miguel Pure Foods Co. Inc. and SMC Global Power Holdings Inc.

The Gokongwei group–an ally of the group of businessman Manuel V. Pangilinan which holds the controlling interest in Meralco–has long been speculated to be interested in Meralco.

Last June, SMC raised P17.4 billion from the sale to the open market of an initial 5.7-percent stake in Meralco at P270 a share in a placement deal arranged by Deutsche Bank and Standard Chartered.