San Miguel to sell Philippine power firm stake for $1.66bn

Philippine conglomerate JG Summit Holdings said Tuesday it will buy San Miguel Corp's remaining 27 percent stake in the country's top electricity distributor for about $1.66 billion. In a filing to the Philippine Stock Exchange JG Summit said it will it would acquire the shares in Manila Electric Co. (Meralco) for "approximately 72 billion pesos". "JG Summit intends to finance the acquisition with a combination of debt and equity capital," it added. San Miguel and JG Summit had announced on Monday that they had struck a deal on the sale, subject to the completion of certain mutually agreed conditions, but did not disclose the price or terms. Around 50 percent of Meralco is held by Beacon Electric Asset Holdings Inc, a unit of Hong Kong-based First Pacific, which has said it intends to hold on to its interest in the power distributor. San Miguel had earlier raised 17.34 billion pesos in July from a private placement of a six percent stake in Meralco, which supplies power to metropolitan Manila and neighbouring provinces. San Miguel has been aggressively diversifying from its 123-year-old brewing operations into oil refining, aviation, toll roads and energy. It built up a stake of around 33 percent in Meralco between 2008 and 2009, but failed to secure management control and had since said it was open to selling the shares. JG Summit's interests include property development, banking, airline, petrochemicals, telecommunications, food manufacturing, and power generation. Meralco shares surged 3.15 percent Tuesday to close at 295 pesos. San Miguel rose 0.80 percent to 75.40 pesos, while JG Summit was up 2.98 percent to 39.75 pesos.