* San Miguel exercises option to buy 60 pct of SEA Refinery
* Deal lifts San Miguel stake in Petron to 68 pct
* Petron down as much as 1.6 pct, SanMig down up to 2.2 pct (Adds background, share prices)
MANILA, Dec 16 (Reuters) - Philippine conglomerate San Miguel Corp has exercised a share option allowing it to gain majority control of the country's largest oil refiner Petron Corp .
The deal is part of San Miguel's plan to raise its holdings in Petron to up to 90 percent, with the group looking to invest at least $2 billion in the oil refiner, which it considers undervalued, within the next three years.
San Miguel said in a statement it acquired 60 percent of SEA Refinery Corp, which partly owns Petron, allowing it to raise its holdings in the oil firm to 68 percent.
Last week, San Miguel President Ramon Ang told reporters the group held 38 percent of Petron and was keen to further increase its stake. [ID:nSGE6B700U]
Financial details of the transaction were not provided. As of end September, SEA Refinery held 50 percent of Petron, based on regulatory filings.
After the announcement, Petron shares slipped as much as 1.6 percent. It hit a record high of 14.5 pesos on Wednesday and has more than doubled this year.
San Miguel fell as much as 2.2 percent in a broader market 1.7 percent lower by 0309 GMT.
In August, San Miguel said it had bought 1.52 million shares in Petron for 10.9 billion pesos ($248 million) from SEA Refinery Holdings B.V., a unit of British investment firm Ashmore Group . SEA Refinery Holdings owns SEA Refinery Corp.
San Miguel -- which dominated the local food and drinks market for decades before diversifying into power, oil refinery, infrastructure, telecoms, and mining -- forged an agreement with SEA Refinery Holdings B.V. in December 2008 giving it two years to exercise an option to buy into Petron.
The option expired on Wednesday, Dec. 15.
In 2008, the Ashmore Group bought 40 percent of Petron from state-owned Philippine National Oil Co for around $544 million, raising its stake in the oil refiner to 90.6 percent.
Petron, with a market value of $3 billion, has a public float of 7.5 percent, below the 10 percent minimum required by the Philippine bourse.
Ang has said San Miguel and its listed units, including Petron, were considering hiking public ownership to comply with the bourse's minimum public float rule and take advantage of the strong investor appetite for equities investments. [ID:nSGE6B700U]
($1 = 44 pesos)
(Reporting by Erik dela Cruz; Editing by Rosemarie Francisco)