May 11, 2011
Pure Foods acquires San Miguel's Vietnam-based food unit
San Miguel Corporation (SMC) has completed the transfer of its Vietnam-based food unit to subsidiary San Miguel Pure Foods Co., Inc., marking the end of an asset consolidation that was started in the run-up to last year's failed sale of the diversified conglomerate's food business.
In a disclosure to the local bourse, San Miguel Pure Foods said it shelled out US$16.75 million or the remaining 90% price tag to acquire the Vietnam food business from another San Miguel unit.
This disbursement accounts for roughly two-thirds of the PHP15 billion San Miguel Pure Foods raised from its February share sale.
The February offering had been the most recent attempt of the food unit to raise funds after a failed stake sale last August, when it dropped plans to sell a 49% stake. Final bidders -- Gokongwei-led Universal Robina Corp. and a partnership between Del Monte Pacific, Ltd. and Century Pacific Group of Companies -- had instead wanted 100% ownership in San Miguel Pure Foods.
Last month, San Miguel Pure Foods spent PHP2.88 billion (US$67.18 million) for the full payment of food-related brands and other intellectual property rights acquired from San Miguel Corp. in July last year and PHP170.388 million (US$3.97 million) for items like underwriting fees, listing and processing fees, legal and professional fees and documentary stamp tax.
The remaining cash will be used to fund potential investment opportunities, settle other disbursements like professional fees and other miscellaneous expenses.
Freya B. Natividad, investment analyst at brokerage firm 2Trade-Asia.com said that San Miguel's shift from food and brewery and liquor is part of the company's move to invest in other businesses like mining.
Natividad said Pure Foods will be solely focused on food, adding that the consolidation will be also beneficial for potential sale to investors moving forward.
The food giant had said it expects to hit a record PHP90 billion (US$2.09 billion) in revenues this year from PHP80.4 billion (US$1.86 billion) last year on the back of continuous expansion and higher demand.
In a separate disclosure, San Miguel Pure Foods declared a PHP20-per-share (US$0.46) cash dividend for holders of preferred shares on record as of May 23.
For common shareholders, the company is giving out a PHP3-per-share dividend.
The cash dividend will be paid to holders of common and preferred share on June 13 and June 3, respectively.
San Miguel Pure Foods -- which owns the brands Purefoods, Magnolia, Monterey, Star, San Mig Coffee, and B-Meg -- claims to account for six of every 10 hotdogs and four of every 10 chickens sold in the country.
