February 20, 2009
Share Acquisition for Investment in the Beer Business of San Miguel
Tokyo, February 20, 2009—Kirin Holdings Company, Limited (Tokyo, Japan; President and CEO, Kazuyasu Kato; hereafter, "Kirin") and San Miguel Corporation (Manila, Philippines; Chairman and CEO, Eduardo M. Cojuangco, Jr.; hereafter, "SMC") have entered into a Share Purchase Agreement by which Kirin purchases the shares in San Miguel Brewery, Inc. (Manila, Philippines; Chairman, Ramon S. Ang; hereafter, "SMB"), the domestic beer business subsidiary of SMC. This investment will significantly contribute to Kirin's further growth in its alcohol business in Asia and Oceania.
Kirin will purchase 6,665,023,690 shares in SMB (43.249% of the issued and outstanding shares*1) from SMC through a private transaction at a purchase price of Php8.841 per share (approx. ¥17*2), resulting in the total acquisition price of approximately Php58.93 billion (approx. ¥112 billion*2). The purchase will be made in two phases, targeting for final closing by the end of May 2009.
In addition, Kirin will launch a tender offer to purchase additional shares from SMB shareholders other than SMC. All the shares tendered shall be purchased by Kirin at the same price as the purchase price from SMC. The details of the tender offer will be announced once determined.
By combining both transactions, Kirin will be able to obtain up to 7,551,134,690 SMB shares (49% of the issued and outstanding shares).
- *1 Based on the number of shares as of December 31, 2008.
- *2 Php1.00 = ¥1.9 (as of February 18, 2009)
Additionally, Kirin, SMC and SMB will undertake to negotiate exclusively for SMB's potential purchase of shares in SMC's overseas beer business. The exclusivity will be in effect for six months after SMC's announcement of its intent to sell the shares in its overseas beer business. Detailed review will be initiated once SMC makes official announcement for such sale.
Kirin Group's long-term business vision, as outlined in "Kirin Group Vision 2015 (KV2015)", is to be a leading company in Asia and Oceania, and Kirin has been promoting a strategy in these regions of focusing on profitable operation.
SMB's beer market share in the Philippines is approximately 95%, and its parent SMC has long been in the business in Asia, including China, Vietnam, Indonesia and Thailand. Through this investment, Kirin is aiming to establish a strong operational base for both manufacturing and sales in the Asia and Oceania markets, accelerating creation of group synergies in alcohol business.
Kirin Group will constantly seek to nurture close bonds with its customers and offer the happiness of food and health, based on its marketing slogan oishisa wo egaoni - taste that makes you smile.
Summary of the Acquisition of SMB Shares
| 1. | Method of Acquisition: | Private transaction between SMC and Kirin |
| 2. | Timing of Acquisition: | Acquisitions will be made in two phases in April and May. Expected timing for final closing is by the end of May |
| 3. | Number of Shares to be Acquired: | 6,665,023,690 shares (43.249% of the issued and outstanding shares*1) |
| 4. | Acquisition Price: | Php8.841 per share (Approx. ¥17*2) Total acquisition price: Php58.93 billion (Approx. ¥112 billion*2) |
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San Miguel Brewery, Inc.
| 1. | Company Name: | San Miguel Brewery, Inc |
| 2. | Location of Headquarter Office: | Manila, Philippines |
| 3. | Chairman: | Ramon S. Ang |
| 4. | Total Equity: | Php15.3 billion (Approx. ¥29.1 billion*1) |
| Total Assets: (As of FY ended December 2007) |
Php22.6 billion (Approx. ¥42.9 billion*1) | |
| 5. | Net Sales: | Php48.8 billion (Approx. ¥92.7 billion*1) |
| Operating Income: | Php15.6 billion (Approx. ¥29.6 billion*1) | |
| Net Income: (As of FY ended December 2008) |
Php10.0 billion (Approx. ¥19.0 billion*1) | |
| *1 Php1.00 = ¥1.9 (as of February 18, 2009) * Fiscal year end for SMB is December 31 |
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| 6. | Number of Employees: (As of FY ended December 2007) |
2,823 |
| 7. | Business Description: | Production and sale of beer in the Philippines |
| 8. | Core Brands: | San Miguel Pale Pilsen, San Mig Light, Red Horse, Gold Eagle |
| 9. | Manufacturing Facilities: | 5 manufacturing facilities (all in the Philippines) |
San Miguel Corporation
| 1. | Company Name: | San Miguel Corporation |
| 2. | Location of Headquarter Office: | Manila, Philippines |
| 3. | CEO : | Eduardo M. Cojuangco, Jr. |
| 4. | Total Equity: | Php146.1 billion (Approx. ¥277.6 billion)*1 |
| Total Assets: (As of FY ended December 2007) |
Php288.1 billion (Approx. ¥547.4 billion)*1 | |
| 5. | Net Sales: | Php154.9 billion (Approx. ¥294.3billion)*1 |
| Operating Income: | Php12.0 billion (Approx. ¥22.8 billion)*1 | |
| Income Before Income Tax (from continuing operations): |
Php12.8 billion (Approx. ¥24.3 billion)*1 | |
| Net Income (As of FY ended December 2007) |
Php8.4 billion (Approx. ¥16.0 billion)*1 | |
| *1 Php1.00 = ¥1.9 (as of February 18, 2009) * Fiscal year end for SMC is December 31 |
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| 6. | Number of Employees: | Approx. 19,000 (including SMB employees) |
| 7. | Business Description: | |
| Beverage: Production and sale of Beer, Liquor, and Non-alcoholic Beverages (44%) Food: Production and sale of dairy products, Processing and sale of meat (44%) Packaging: Cans, plastics and glass containers (12%) ( ) represents the percentage to the total sales (As of FY ended December 2007) |
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| 8. | History: | |
| 1890 | San Miguel was founded as a brewery |
| 1922 | Enters soft drink business |
| 1938 | Enters packaging business |
| 1948 | Begins beer production in Hong Kong brewery (overseas operations started) |
| 1981 | Established JV with Coca Cola |
| 1987 | Acquired La Tondena Distillers, Inc. |
| 1991 | Established JV with Nihon Yamamura Glass for a glass plant |
| 2000 | Acquired Australian premium beer manufacturer J. Boag & Son |
| 2001 | Acquired meat processing company Purefoods Corporation Reacquired Coca Cola Bottlers Philippines, Inc. Acquired Cosmos Bottling Corporation |
| 2002 | Kirin Brewery (current Kirin Holdings) invested 15.55% in the Company |
| 2004 | Acquired 51% of the leading Australian juice manufacturer Berri Ltd. |
| 2005 | Kirin Brewery made additional investment in the Company in January and April (current investment ratio: 19.91%, as of September 2008) |
| 2005 | Acquired dairy manufacturer National Foods Limited |
| 2007 | Sold shares in Coca Cola Bottlers Philippines, Inc. Sold shares in Del Monte Pacific Ltd. Sold shares in National Foods Limited to Kirin Holdings Company, Limited. |
| 2008 | Sold shares in J. Boag & Son to Lion Nathan Limited SMB listed at Philippine Stock Exchange -Percentage of shares at IPO:5.75% |