SMB okays P39-billion bond issue to fund acquisitions

MANILA, Philippines -- San Miguel Brewery Inc. (SMB) approved yesterday the issuance of P38.8 billion worth of bonds to fund the acquisition of the domestic beer brands and land from parent firm San Miguel Corp.

San Miguel recently spun off about P39 billion worth of brewing assets in line with its radical shift into new lines of business.

The sale is in preparation for the entry of Japanese brewer Kirin Holdings Co. Ltd., which secured exclusive rights to acquire San Miguel’s 43.25 percent stake in SMB. It is part of an ongoing restructuring program aimed at further boosting its growth.

SMB said the the purchase is a strategic initiative to secure the company’s main competitive advantage as it needs full control over the brands.

SMB’s beer brands San Miguel Pale Pilsen, Red Horse, San Mig Light and Gold Eagle, are among the top four brands in the country. It also offers popular brands such as Super Dry, Cerveza Negra, San Mig Strong Ice, Gold Eagle and Cali ,the country’s only malt-based non-alcoholic drink.

Last year, SMB, the crown jewel of Southeast Asia’s biggest food and beverage conglomerate, posted a net profit of P10.04 billion or an increase of 25.3 percent from the 2007 figure. Net sales improved 11 percent to P48.8 billion with sales volume rising four percent to 174.5 million cases.

Operating income amounted to P15.6 billion, up 27 percent from P12.3 billion.

SMB, which contributes around 40 percent of group operating profit, is undertaking new programs to offer wider availability and ensure consumer satisfaction.