San Miguel Buys Philippine Airlines
San Miguel Corp. has sealed a deal to acquire 49 percent Lucio Tan’s PAL Holdings Inc. for about $500 million, thereby acquiring control in Philippine Airlines.
The deal is set to be announced this afternoon.
An emergency board meeting was convened by PAL Holdings on Monday afternoon to discuss the deal with SMC, which had been in the works for the last three months.
The sources said that under the arrangement, SMC would buy 49 percent of PAL Holdings, a publicly listed entity. The structure of the deal is described by sources as complex but in the end, SMC will have management control of the airline.
SMC’s entry as Tan’s strategic partner was seen helping in the refleeting and modernization of the aircraft of Philippine Airlines in preparation for the projected heavy influx of tourists in the coming years, which will be beneficial to the Philippine tourism industry.
Industry sources said Tan and SMC president Ramon Ang had been in talks for the latter’s potential investment in PAL, initially meant as a personal venture for Ang, who is himself a pilot. Also, the airline business is seen in line with SMC’s diversification into infrastructure-building, and it forms synergy for its other businesses, including Petron, PAL’s supplier of fuel.
Ang’s business rival, Manuel V. Pangilinan, likewise expressed interest in PAL and while an alternative offer was kept as a back-up plan, industry sources said Tan himself and his brother Harry Tan had favored Ang’s proposal.blog comments powered by Disqus