San Miguel sells stake in Manila Electric for around $2 billion
MANILA (Reuters) - San Miguel Corp (SMC.PS) has agreed to sell its 27.1 percent stake in the Philippines' largest power retailer Manila Electric Company (Meralco) (MER.PS) to local conglomerate JG Summit Holdings Inc (JGS.PS) in a deal worth around $2 billion.
The sale fits in with San Miguel's strategy to cash in some of its assets to raise funds for infrastructure projects.
The company did not put a value on the deal, but San Miguel's stake in Meralco is worth around 87 billion pesos ($2 billion) at Monday's closing price of 286 pesos. Credit Suisse was San Miguel's financial adviser for the transaction.
JG Summit could not be immediately reached for comment.
Meralco shares closed 4.4 percent higher after San Miguel made the disclosure to the stock exchange. San Miguel ended up 0.4 percent while JG Summit lost 1.8 percent as the stock market index .PSI slid nearly 3 percent.
In July, San Miguel sold a 5.7 percent stake in Meralco to investors that included the Metro Pacific group (MPI.PS). That deal allowed San Miguel to raise $400 million to fund expansion plans that include beefing up other power assets.
San Miguel expects to retain a 4 percent stake in Meralco after the courts clear a dispute over the ownership of the stake with the state-owned Land Bank of the Philippines, San Miguel President Ramon Ang told Reuters on Monday.
San Miguel, which started as a brewery more than a century ago, has aggressively expanded over the last five years into power, airlines, mining, telecoms, oil refining and distribution, and infrastructure.
On Friday, the Department of Transportation and Communications announced that President Benigno Aquino has approved a $612 million project of the San Miguel-Citra Group involving a road that will connect two major highways on Luzon island.
Meralco is controlled by Beacon Electric Asset Holdings Inc, an unlisted company owned by Metro Pacific Investments Corp and Hong Kong's First Pacific Co Ltd (0142.HK).
($1 = 43.5 pesos)
(Reporting by Rosemarie Francisco and Erik dela Cruz; Editing by Miral Fahmy)