San Miguel Corp. (SMC), through its power arm San Miguel Global Power Holdings Corp., has finalized its acquisition of a 3.9% stake in Manila Electric Co. (Meralco), the country’s largest electricity distributor, for PHP 3.9 billion. The deal, involving 43.23 million Meralco shares purchased from the Land Bank of the Philippines at PHP 90 per share, marks the end of a 17-year legal saga that began in 2008. SMC confirmed the sale in a July 23 SEC disclosure.

The transaction was cleared following the Sandiganbayan’s June 14, 2024 resolution, which acquitted former Landbank president Gilda Pico and vice president Carel Halog of graft charges related to the share sale. This resolution removed the final legal hurdle, allowing SMC to secure the minority stake at a significant discount compared to Meralco’s current market price of PHP 545 per share.

“[That’s] close to PHP 20 billion, which is about 11% of the conglomerate’s market cap,” said Nicky Franco, research head at Abacus Securities, in an Insiderph.com news article referenced in the disclosure. “RSA (Ramon S. Ang) will probably flip it to get some breathing room in terms of overall debt burden/leverage.”

The acquisition adds to San Miguel Corp.’s (SMC) investments in power generation and infrastructure, including its role in the USD 3.3 billion Batangas LNG facility deal with Manila Electric Co. (Meralco) and AboitizPower.

How will San Miguel’s acquisition impact the Philippine energy sector? Share your insights and join the discussion on this pivotal development. 

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