SMB completes acquisition of San Miguel's beer assets

MANILA, Philippines - San Miguel Brewery Inc. (SMB) disclosed yesterday that it has completed the acquisition of the brewery assets and facilities of its parent firm San Miguel Corp. for P6.6 billion.

In a disclosure to the Philippine Stock Exchange, SMB said it executed a deal to purchase all shares of SMC in Brewery Properties Inc., the company to which San Miguel transferred the land on which all of its production facilities and certain sales offices used for its beer businesses are located.

The purchase price was equivalent to the appraised value of the land while the shares acquired comprise 40 percent of the issued and outstanding capital stock of Brewery Properties.

SMB earlier said the plan to buy the beer assets from its parent was a strategic initiative to secure a competitive advantage since it would be able to maximize the use of existing brands and develop its own brands that will cater to varied consumer needs.

The brewery also said the brand ownership would ensure that margins could be maintained and improved over the long term since it would no longer pay royalties to San Miguel Corp.

SMB used proceeds from the P38.8 billion worth of bonds issued last year to fund the acquisition of beer assets.

In another development, SMB’s board of directors approved the declaration of a cash dividend of P0.14 per share, payable on Dec. 13 to all stockholders of record as of Nov. 25, 2010.