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San Miguel Buys Into Firm Led By Ongpin, Zobel and Campos


Diversifying food and beverage conglomerate San Miguel Corp. will buy a 49% stake in a major shareholder led by former trade minister Roberto V. Ongpin.

San Miguel told the exchange yesterday its board had approved an investment in Top Frontier Investment Holdings, Inc., without disclosing the amount involved.

Top Frontier owns 28% of San Miguel, buying the entire stake of the conglomerate’s retirement plan for P64.3 billion in November, the biggest corporate deal last year. Major shareholders are Mr. Ongpin, IƱigo U. Zobel and Joselito D. Campos, Jr.

Messrs. Ongpin and Zobel are also major shareholders of Q-Tech Alliance Holdings, Inc., which bought 20% of the conglomerate from Japan’s second- largest brewery, Kirin Holdings Co., for P39.61 billion last year.

San Miguel said Top Frontier would buy 327 million San Miguel shares owned by Q-Tech Alliance, with an option to buy the remaining 302 million. Top Frontier will also acquire Q-Tech Alliance’s rights over “various major mining assets.”

Once Top Frontier acquires Q-Tech’s shares in the conglomerate, the investment company will offer to buy stock held by the minority shareholders of San Miguel at P75.00 apiece in March.

“Top Frontier has also agreed to ensure the pursuit of strategic direction of San Miguel to diversify into infrastructure, telecommunications, mining, energy and related industries. As agreed by both companies, the composition of San Miguel’s board will remain the same,” San Miguel said in a statement.

San Miguel said its investment in Top Frontier was approved by the board on the premise that Top Frontier would do an “orderly sell down of San Miguel shares in order to broaden San Miguel’s shareholder base.”

“[We are] confident that an investment in Top Frontier is in the long-term interest of the shareholders of San Miguel. This investment will ensure the continuity of the conglomerate’s ongoing business operations and strategic plan and the stability of its organization,” San Miguel President Ramon S. Ang said in the statement.

A San Miguel spokesman said the move was a “defensive” one, explaining that while Messrs. Ongpin, Zobel and Campos are allies of San Miguel, the conglomerate needed a formal arrangement.

“This formalizes the assurance that Top Frontier will not disrupt the operations of the company and likewise assures that Top Frontier will not be able to sell to a third party,” he said.

Analyst Jose Mari B. Lacson of Campos, Lanuza & Co., Inc. said San Miguel’s acquisition of the 49% stake in Top Frontier would not add value to the diversifying giant.

“These types of [cross-ownership] is typical in Japan. I do not know if there are personal motivations but this type of [buy-in] happens elsewhere in the world. One way to view this is that San Miguel is helping its [owners] by giving [them] money although we do not know if [they really need] the money,” Mr. Lacson said.

San Miguel has an option to buy a majority in Petron Corp., the country’s largest oil refiner, from the Ashmore Group, which is tied to Mr. Ongpin.

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Tuesday, December 12, 8:33 am

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