By Jenniffer B. Austria

FORMER Trade Minister Roberto Ongpin and a partner are buying Kirin Holdings Co.’s 19.9-percent stake in San Miguel Corp. while Kirin, Japan’s second-largest brewer, is buying 43.25 percent of San Miguel Brewery, San Miguel Corp.’s beer unit, for P58.9 billion.

Q-Tech Alliance Holdings Inc., the company formed by Ongpin and Eric Recto, president of Petron, the Philippines’ largest oil refiner, is buying Kirin’s entire stake in San Miguel Corp.

The two deals mean Kirin is divesting from San Miguel Corp. but is moving to own San Miguel Brewery, which controls 95 percent of the Philippines’ beer market, in the face of slowing sales in Japan.

Q-Tech’s purchase of Kirin’s stake in San Miguel Corp. means it is acquiring a big slice of the largest food-and-beverage company in Southeast Asia.

Ongpin and Recto formed Q-Tech for P39.6 billion with Mirzan Mahathir, the eldest son of former Malaysian Prime Minister Mahathir Mohamad; Seumas James Dawes, a senior fund manager of the UK-based Ashmore group; Bahrain’s QTel Al Sadd Holdings SPC, and Alexander Poblador.

“We think San Miguel is a good investment,” Recto said in a text message.

“The opportunity to pick up a 20-percent block at a price we think is fair does not come too often.”

Kirin will spend only P19.3 billion for a direct stake in San Miguel Brewery as a result of the sale of its stake in San Miguel Corp. Kirin’s purchase of the brewer will reduce San Miguel Corp.’s stake in its beer unit to 51 percent from 94.25 percent.

The Japanese brewer will pay P8.84 for each share of San Miguel Brewery, which was spun off last May as San Miguel Corp. diversified into energy and mining. It will then launch a tender offer to buy additional shares from other shareholders at the same price.

San Miguel Brewery’s share price dropped 7 percent to P9 yesterday from P9.70 on Thursday following San Miguel Corp.’s disclosure. Kirin declined 0.8 percent to 930 yen in Tokyo.

Kirin’s deal with San Miguel includes negotiations to buy San Miguel Brewery’s business overseas. San Miguel operates two breweries in China and one each in Indonesia, Vietnam and Thailand.

“We are extremely pleased that we have reached an agreement with Kirin,” San Miguel president Ramon Ang said.

“Our alliance will create exciting opportunities on multiple fronts for our brewery business.”

“We view the investment in San Miguel Brewery as positive since it entails the core alcohol business with high profitability and growth potential,” JPMorgan Chase & Co. analyst Naomi Takagi said in a report before Kirin announced the deal with San Miguel.

“Ultimately, Kirin would like to make San Miguel Brewery a subsidiary with additional investments.” With Bloomberg