Further to the 26 June story in GlassOnline“s “Weekly World News”, shareholders have finally approved the A$ 3.4 billion deal made by Australia“s Coca-Cola Amatil (CCA) with San Miguel Corporation o…
Further to the 26 June story in GlassOnline“s “Weekly World News”, shareholders have finally approved the A$ 3.4 billion deal made by Australia“s Coca-Cola Amatil (CCA) with San Miguel Corporation of the Philippines. The nine resolutions, which included the allotment of a 25% stake in CCA to San Miguel in return for the ownership of Coca-Cola Bottlers Philippines, were all passed unanimously at an extraordinary general meeting. Investors are confident that the deal with San Miguel will deliver strong earnings growth in the 1998 financial year. The combined operations are expected to deliver a net profit in the year to December 1998 of close to A$ 300 million, up from A$ 142 million in the 1996 year and the A$ 230 million forecast for 1997. The only objections put forward by shareholders concerned the dilution of Australian ownership of CCA and the lack of independent directors on the soft-drink group“s board. Only one non-executive director, Mr. Michael Astley, is considered by some institutional and small investors as independent, while the rest are associated with CCA, Coca-Cola Co. or San Miguel. However, the Chairman, Mr. Dean Wills, defended the company“s board against claims it did not represent local minority shareholders. Mr. Wills told shareholders that CCA, as a company operating only one business in 18 countries, needed directors with in-depth knowledge of the business that only came with years of experience in the beverages industry. Under the terms of the deal, CCA will issue 192.5 million shares to San Miguel and 82.5 million to the US Coca-Cola Co., which, as agreed, now has 33% of the Australian company. San Miguel has agreed not to sell its stake for three years. San Miguel Chairman and CEO Mr. Andres Soriano, Chief Financial Officer Mr. Delfin Gonzalez and another director, Mr. Rafael Alunan, joined the CCA board, and a fourth nominee has yet to be named. Investors in San Miguel are less happy with the deal. They feel that in time the swap will not be favourable for the Philippines company and say that there should have been a corresponding increase in SMC“s equity in CCA to match that of the number (4) of board seats, and that SMC should have bargained for better terms with CCA.