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San Miguel and Coca-Cola Amatil sign US$2.7 billion deal.

MANILA, Philippines--(BUSINESS WIRE)--June 3, 1997--San Miguel Corporation (SMC), the Philippines-based beverage, food and packaging group, and Coca-Cola Amatil Ltd. (CCA) of Australia announced today that they have entered into definitive agreements to integrate their operations in the carbonated soft drink business through a stock swap valued at approximately US$2.7 billion. The formal exchange of shares is scheduled for July 1, 1997, subject to CCA shareholder approval and receipt by the parties of the necessary regulatory and creditor approvals.

The deal involves swapping San Miguel's 70% equity in Coca-Cola bottlers Philippines, Inc. (CCBPI) for a 25% stake in CCA, one of The Coca-Cola Company's largest anchor bottlers with operations in 17 countries. This will make San Miguel, the Philippines' leading beverage, food and packaging company, the second largest shareholder of CCA after The Coca-Cola Company (TCCC), which owns 30% of CCBPI and will remain CCA's largest stockholder with a holding of 33% after swapping its equity in CCBPI for additional shares in CCA.

Under the terms of the agreement, CCA will issue 293 million ordinary shares to San Miguel and TCCC. San Miguel will receive 192.5 million CCA shares in exchange for its 70% equity in CCBPI. In addition, a wholly-owned subsidiary of San Miguel will receive another 18 million shares in consideration for a non-compete agreement, bringing to 210.5 million the total number of CCA shares that will go to the San Miguel Group. TCCC will receive the remaining 82.5 million CCA shares in exchange for its 30% stake in CCBPI.

The shares to be received by the San Miguel Group are worth approximately US$1.9 billion at the pre-announcement price. Because of increases in the price of CCA stock, which closed at A$15.40 per share on June 3, 1997, the value of these shares has appreciated to approximately US$2.4 billion since the parties agreed to enter into the deal last April 3.

Upon completion of the transaction, CCBPI will become a subsidiary of CCA and will be deconsolidated by San Miguel, which will then account for its investment in CCA using the equity method. Four nominees of SMC will be invited to join the board of CCA.

The transaction greatly expands CCA's presence in Asia and makes it the largest Coca-Cola anchor bottler outside the United States with a consumer base of 450 million people accounting for approximately 8% of world-wide unit case sales of products of The Coca-Cola Company.

Founded in 1890, San Miguel is the largest food and beverage company listed in S.E. Asia and is active within the brewing and beverages, food and food-related, and packaging areas. San Miguel's ordinary shares trade on the Philippine Stock Exchange and trade in ADR form in the US (each equal to ten SMC Class B common shares). Prices for the ADRs may be accessed on the NASD OTC Bulletin Board under the symbol SMGBY. Quotes for San Miguel ordinary shares may be accessed on Bloomberg under the symbol SMC/B PM and on the Reuter Equities 2000 Service under the symbol SMC.

CONTACT: Alberto M. de Larrazabal

San Miguel Corporation

011-632-632-3691

- or -

Miguel C. Suarez

San Miguel Corporation

011-632-632-3514
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Publication:Business Wire
Date:Jun 3, 1997
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