Michael G. Tan thrust into limelight
Unlike other Filipino-Chinese taipans, it took a lot longer for Lucio Tan—the country’s second-richest man, according to Forbes magazine—to make clear to the public the succession plans for his vast empire.
But such is no longer the case after the tobacco and beer magnate announced Tuesday that his diverse business empire composed of at least 17 large and small firms would be consolidated under publicly listed Tanduay Holdings Inc.
Soon to be renamed LT Group Inc., the holding company is headed by the taipan’s son, Michael, whose profile has risen since he took over the helm of his father’s flagship beverage firm, Asia Brewery Inc.
Interviewed by the Inquirer Tuesday, the foreign-schooled Michael conceded that his father’s decision to consolidate his business empire under one roof comes late compared to other taipans.
But the timing is good.
“It’s all about timing,” he said. “The stock market is up and it’s a good time to do this.”
He added jokingly that the name “LT Group” comes after similar moves by other taipans to consolidate their empires under holding firms named after their patriarchs.
“We’ve seen ‘JG Summit’ (owned by John Gokongwei Jr.) and we’ve seen ‘GT Capital’ (owned by George Ty), so why reinvent the wheel? It’s a trend and it works,” he said.
Indeed, stock market investors reacted positively to the decision to inject at least P200 billion worth of assets into the lightly traded holding firm.
At the Philippine Stock Exchange on Wednesday, the stock was heavily traded and its stock price shot up 50 percent—the most any stock can rise in a single session.
Now 46 years old, Michael Tan took his early education at the Jesuit-run Xavier School, which caters mainly to affluent Chinese-Filipino students.
“I studied there until second year high school, then my father sent me to Singapore, where I continued high school for three more years,” he said.
He was then sent to study at the prestigious Peking University where he soaked up Chinese culture, before he went to the University of British Columbia in Vancouver, Canada, from which he graduated with a civil engineering degree.
On returning to the Philippines, he was gradually eased into the day-to-day operations of his father’s empire, starting with the brewery business and eventually in the real estate firm, Eton Properties.
At present, Michael remains the chief operating officer of Asia Brewery—the country’s second-largest beer maker—and the officer-in-charge at Eton. He also holds directorships representing his father’s concerns in Allied Banking Corp., the Philippine National Bank, Philippine Airlines and Philip Morris Fortune Tobacco Co., among others.
It remains unclear when the 78-year-old Lucio Tan will retire, but it has become increasingly clear that Michael, given the roles he has been playing in running the business, is his heir apparent.
Asked to describe his management style, Michael says he—like his father— has an eye for detail. But he is quick to point out that he is less of the micromanager that his father is known to be—something business associates confirm.
“It is also important to me to establish accountability,” he said, adding that while he gives greater latitude to people working under him, he is strict when it comes to defining which company official is responsible for what.
“I don’t like officials pointing fingers at each other,” he said.
Going forward, Michael said LT Group Inc. will remain focused on the businesses of aviation (through its 51 percent stake in Philippine Airlines); tobacco (through PMFTC); beverages (through Asia Brewery); real estate (through Eton Properties); and banking (through the soon to be merged PNB and Allied Bank).
“These are really the five pillars of our business, and we intend to remain focused on them,” he said. “I want to look at the synergies that can happen between them and leverage the experience we have in these industries.”
First up on his plate as the head of the consolidated holding firm is to restore its stock market free float to the minimum of 10 percent, as it is expected to drop to 6 percent once the major operating firms are folded in.
“We will have to do a follow-on offering of primary shares,” he said, adding that the move will be part of a series of moves that will result in the LT Group firms being more liquid on the bourse.
Characteristically, he is reluctant to reply when asked whether the corporate changes signal his looming ascension as his father’s chosen one.
“What we are seeing here is only the start of a process,” he said.
