San Miguel and RFM agree to speed up Cosmos sale

Philippine food and beverage groups San Miguel Corp. and RFM Corp. recently agreed to speed up the completion of the sale of RFM“s soft-drink unit, Cosmos Bottling Corp., to San Miguel.
“Both San Mi…

Philippine food and beverage groups San Miguel Corp. and RFM Corp. recently agreed to speed up the completion of the sale of RFM“s soft-drink unit, Cosmos Bottling Corp., to San Miguel. “Both San Miguel and RFM agreed to take measures to accelerate the completion of the due diligence and the drafting of the share purchase agreement,” said RFM in a disclosure to the stock exchange. This is in line with the provisions of the memorandum of understanding signed by the two groups on 6 August this year, which set a target period of 30 days for the due diligence and a target date of 15 September for the signing of the definitive agreement. Under the memorandum of understanding, RFM agreed to sell its 83.2% stake in Cosmos to San Miguel, which valued the soft-drink producer at PHP 15 billion. Both companies have said they will push through with the deal despite a suit filed by a lawmaker against Cosmos and RFM 24August. The case filed by Congressman Augusto Syjuco seeks to rescind a 1996 sale of his Jaz Cola Philippines to Cosmos. He alleged that Cosmos failed to completely pay the PHP145.6 million purchase price for Jaz Cola, which has a substantial share of the soft-drink market in central Philippines. In response to Syjuco“s suit, a lower court on 27August issued a 17-day temporary restraining order against the inclusion of the assets of the central Philippines operation of Cosmos in its sale to San Miguel. RFM has denied Syjuco“s claim, adding that RFM“s auditors and Jaz Cola President Emmanuel Rios have certified that Cosmos fully paid for its purchase of Jaz Cola in March 1997.