Kirin eyes bigger stake in San Miguel Brewery

The talks come as San Miguel is trying to acquire stakes in two of the Philippines’ biggest energy companies – Manila Electric and refiner Petron – in an effort to re-invent itself as a utilities company. San Miguel hopes to expand from its core food and drinks business towards heavy industry such as mining, power and infrastructure.

Apparently, these other industries offer better growth and profit prospects than the beverage industry.

Whether San Miguel will be successful remains to be seen. Investors remember only too well San Miguel Brewery’s botched IPO in 2008. At the start of 2008, San Miguel Brewery was gearing up to be the Philippines’ biggest-ever IPO with maximum proceeds of USD 600 million plus. But turbulent market conditions and investor complaints that the offer was too expensive forced San Miguel to twice shrink the price range and halve the offer to just 5.0 percent of San Miguel Brewery’s stock.

San Miguel Brewery, which has a 95 percent share of the Philippines’ beer market, is the biggest subsidiary of San Miguel Corporation – accounting for 35 percent of group consolidated sales of 155 billion pesos (USD 3.3 billion) in 2007.

Details of Kirin’s involvement with San Miguel Brewery have yet to be finalised.