San Miguel defends merger

San Miguel defends merger

MANILA (AFP): San Miguel Corp. (SMC) chairman Andres Soriano yesterday defended the merger of the company's soft drink operations with Coca-Cola Amatil Ltd. of Australia as a major step for the Philippine giant.

"In one quantum leap, we expand our horizon from the confines of the Philippine domestic market to an international arena spanning three continents with a consumer base of 448 million," Soriano told SMC's annual stockholders meeting.

A decision this month by San Miguel to merge its highly profitable soft drink bottling operation, Coca Cola Bottlers Philippines Inc., with CCA -- a deal worth US$2.68 billion -- has been criticized by investors.

SMC had admitted there were "negative perceptions" due to the belief that Amatil was not as profitable as Coca Cola Bottlers Philippines.

But Soriano said the merger "places San Miguel in the forefront of the global dynamic of the softdrink industry," adding that "any negative in the short term will be minimal."

He also denied that the fall in the price of San Miguel's stocks last week was due to the merger, attributing it to the volatile nature of the Philippine stock market, and the fall in market confidence in Thailand and Wall Street's losses.

San Miguel Corp. saw its A shares rise by 50 centavos to 54 pesos while its B shares rose by 1.50 pesos to 82 pesos yesterday.

Soriano said reports in the press over the merger and disagreements with the Philippine Commission on Good Government (PCGG), which holds 48 percent of the SMC shares, "were needlessly harmful."

The Soriano family holds less than five percent of the beer- based multi national, founded by their ancestors in 1890.

He also denied that there was conflict between San Miguel and the PCGG, saying the PCGG was supportive and satisfied with the company's management.