San Miguel to acquire ‘major’ Asian company by July
MANILA, Philippines—San Miguel Corp. officials said on Tuesday the company would sign a “major” international acquisition by July and double its stake in domestic power generation in five to seven years as part of its diversification program.
But the 120-year-old conglomerate is still in the “early” stages of its transformation, according to SMC president Ramon S. Ang in Tuesday’s report to stockholders. Over time, he said, SMC would like to see a 70:30 business mix in favor of new investments.
Talking to reporters after the stockholders’ meeting, Ang said SMC would sign by July a deal on the acquisition of a “major” Asian company. But he said this would not necessarily result in SMC’s renewed appetite for aggressive offshore acquisitions like what was seen in the past.
“We remain domestic-focused but we’ve long been watching out for this opportunity. It’s a very profitable company that has been operating for a long time and has a good network,” Ang said, referring to the prospective regional acquisition.
During the stockholders’ meeting, SMC chairman Eduardo Cojuangco Jr. said the company’s new growth engines have been performing well as planned. “With our new businesses, we have more diverse income streams and more paths to grow than ever before. As these segments become larger and their contributions more manifest, we are confident that we will deliver much better value,” he said, adding that favorable demographics, rising disposable incomes and healthy domestic economic growth have been pointing toward compelling long-term prospects for the Philippines.
“We are planning to double our power-generating capacity over the next five to seven years and again stand to benefit from both the growing demand for electricity and a shortage in electricity supply,” Cojuangco said.
Earlier, SMC was reported as planning to bid for five more power plants to be privatized by the government: the 640-MW Unified Leyte geothermal power plants, the 149-MW Naga power facility, the 650-MW Malaya thermal power plant, 140-MW Casecnan hydroelectic power complex and the 728-MW Caliraya-Botocan-Kalayaan hydropower facilities.
In 2010, power contributed 14 percent to SMC’s revenues compared with 18 percent from beverages, 16 percent from food and 5 percent form packaging. Oil refining unit Petron Corp. contributed the biggest share equivalent to 47 percent of revenues in 2010.
