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Friday, March 29, 2024

San Miguel, big foreign firm in talks for merger

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San Miguel Corp. is planning a possible merger with a foreign company that could “double the size” of the Philippine conglomerate and boost annual revenues to over P1 trillion, its top executive said Monday.

“I’m looking at a large company which I hope to convince soon and this company will double the size of San Miguel all of a sudden,” San Miguel president  Ramon Ang told reporters.

“This is like a merger with one company which is a little bit bigger or about the size of San Miguel,” he said.

Ang did not provide additional details, but said the foreign company had “huge profit” and its pre-cash flow was around $3 billion.

Ang said the merger would help bring San Miguel closer to achieving its target of P1 trillion in annual revenues.

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“When we consolidate all our businesses, maybe we’ll hit it next year,” he said.

San Miguel’s net income fell 45 percent in 2014 to P28.1 billion from P50.7 billion in 2013, but consolidated sales revenues rose 5 percent to P782 billion, as majority of its businesses posted higher sales.

The conglomerate’s 2013 net income included P40 billion in one-time gain from the sale of the company’s stake in Manila Electric Co.  San Miguel said recurring net income posted a 244-percent hike in 2014.

San Miguel  is among the largest and most diversified Philippine conglomerates. Its wide range of businesses include beverages, food, packaging, fuel and oil, energy, infrastructure, telecommunications, mining and real estate.

San Miguel said first-quarter net income this year stood flat at P6 billion, as the P3-billion loss incurred by oil unit Petron Corp. tempered the strong performance of beer, packaging and food manufacturing subsidiaries.

San Miguel said in a presentation material posted on its Web site first-quarter net sales declined 18 percent to P159.2 billion from P194.9 billion posted in the same period a year ago.

Income from operations, however, grew 4 percent to P22.4 billion.

“Both its core businesses and power unit delivered solid results underlining the value of the company’s diversified and balanced portfolio that enabled it to cushion the impact of Petron’s weak performance,” San Miguel said.

Petron earlier reported an 88-percent drop in first quarter net income to P257 million from P2.22 billion a year ago, as net sales declined 31 percent to P86.7 billion.

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