SMC folding packaging business into PureFoods

The San Miguel group plans to infuse its packaging business into consumer arm San Miguel PureFoods Co. Inc.—which will be renamed San Miguel Food and Beverage Inc.—to complete the consolidation of its traditional businesses under one roof.

San Miguel Corp. president Ramon S. Ang also affirmed plans for an enlarged PureFoods to sell to the public about $3 billion worth of secondary shares by February 2018, bringing to public hands about 30 percent of the company shares.
This equity offering—which could mark a new high in the Philippine Stock Exchange in terms of size at the intended valuation—will target a combination of institutional and retail investors.

Ang said a number of foreign institutional investors had expressed interest to become cornerstone investors for the offering, proceeds from which will be used by SMC to fund new businesses.

SMC recently announced a plan to consolidate all traditional businesses into PureFoods, creating a new local consumer powerhouse with the infusion of P336.35 billion worth of shares in its beer and other beverage businesses. PureFoods will thus own 51.2 percent of beer giant San Miguel Brewery Inc. (SMB) and around 76 percent of Ginebra San Miguel Inc. (GSMI). After this transaction, over 80 percent of Pure Foods’ value will come from SMB, transforming it into a beer play.

This restructuring, Ang said, would allow investors who wanted to invest only in the food and beverage business an option to buy into PureFoods.

Asked why the packaging business was not included when this was also part of SMC’s traditional business, Ang said this was part of the plan but there were many things that needed to be addressed first, such as securing shareholder approval.—DORIS DUMLAO-ABADILLA