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Shareholders approve Kirin acquisition of 15% of San Miguel.

MANILA, Feb. 27 Kyodo

Shareholders in Philippine food and beer giant San Miguel Corp. (SMC) overwhelmingly approved Wednesday Japan's Kirin Brewery Co.'s acquisition of 15% of San Miguel for $536 million.

Approval came from 82% of the shareholders during a special meeting.

SMC Chairman and Chief Executive Eduardo Cojuangco said Kirin's investment would be good for the economy, the company and its shareholders.

President Gloria Macapagal-Arroyo said Kirin's investment ''is a sign of confidence in the Philippine economy.''

''We hope that good corporate governance will be the prevailing trait so that the value of San Miguel will be maximized so that when the government is able to dispose of its shares, then we will have a good price for it again for the benefit of coconut farmers,'' she told reporters.

The Coconut Industry Investment Fund (CIIF) holds 27% of San Miguel.

Arroyo said government plans to sell its shares in the company at a good price ''because government should not engage in business.

The capital infusion will create 442.6 million new B-shares to be issued to Kirin. The new B-shares are equivalent to two board seats in the company.

Under Philippine law, B-shares are open to Filipino and foreign investors while A-shares are exclusive to Filipino investors.

The shareholders' approval follows the signing over the weekend of a two-year interim agreement among representatives of government, San Miguel and Kirin protecting the interests in the company of coconut farmers and the preservation of corporate assets through ''good corporate governance.''

Government has 44% share in SMC through investments by the government's Social Security System and Government Service Insurance System. Cojuangco has 21% of the shares and CIIF 27%.

The CIIF is a fund pooled from taxes collected from coconut farmers by the late President Ferdinand Marcos. The fund has been sequestered by the government through the Presidential Commission on Good Government (PCGG), an agency created to chase down Marcos' ill-gotten wealth.

In 1986, the administration of then President Corazon Aquino, through PCGG, sequestered shares in San Miguel and the United Coconut Planters Bank on the belief Cojuangco acquired them using the coconut levy funds during the Marcos regime's rule.

Cojuangco, an ally of Marcos as well as recently ousted President Joseph Estrada, regained control of the company in 1998.
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Comment:Shareholders approve Kirin acquisition of 15% of San Miguel.
Publication:Asian Economic News
Geographic Code:9PHIL
Date:Mar 4, 2002
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