Australia“s Coca-Cola Amatil (CCA) said last week its proposed US$ 4.1 billion deal with San Miguel Corp. of the Philippines would go ahead as planned, rejecting urgent demands for renegotiation from…
Australia“s Coca-Cola Amatil (CCA) said last week its proposed US$ 4.1 billion deal with San Miguel Corp. of the Philippines would go ahead as planned, rejecting urgent demands for renegotiation from San Miguel“s 48% shareholder, the Philippines“ Presidential Commission on Good Government (PCGG). The Australian bottler dismissed demands from Mr. Magtanggol Gunigundo, the chairman of the PCGG, that the deal be rewritten with terms more favourable to San Miguel. Mr Ian Brown, CCA“s spokesman, said: “The deal is struck. The deal will stand.” Mr. Gunigundo said San Miguel should have received more than the agreed 25% of CCA in exchange for its local franchise, Coca-Cola Bottlers Philippines Inc. (CCBPI). Mr. Gunigundo said San Miguel should also receive more than three seats on Amatil“s 12-member board. He wants a San Miguel representative to serve as CCA“s treasurer or comptroller. Mr. Brown said CCA had no intention of yielding to these demands. The deal would go ahead as planned, subject to CCA shareholder approval at an extraordinary meeting probably on or around 12 June, he said. The PCGG controls 48% of San Miguel. Another 10% is held by the Government Service Insurance System and the Social Security System. It is not clear how far Mr. Gunigundo is prepared to go to win concessions from CCA: his comments came after he voted to approve the actions of the San Miguel board at the company“s annual shareholders meeting on 15 April. The chairman of San Miguel, Mr Andres Soriano III, who earlier defended the plan to merge Coke Philippines with Amatil, indicated a renegotiation of the agreement was unlikely. “There are substantial long-term benefits for Coke Philippines [CCBPI] and for the stockholders of San Miguel,” Mr. Soriano said. “Any negatives in the short term will be minimal.” San Miguel plans to sell CCBPI by mid-July for CCA stock currently valued at US$ 4.1 billion, creating the largest Coke bottler outside the US.