San Miguel : SMC - Form 4-2 for SMB

C06642-2017

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-C

CURRENT REPORT UNDER SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)

   Nov 7, 2017

2. SEC Identification Number

   PW-277

3. BIR Tax Identification No.

   000-060-741-000

4. Exact name of issuer as specified in its charter

   SAN MIGUEL CORPORATION

5. Province, country or other jurisdiction of incorporation

   Philippines

6. Industry Classification Code(SEC Use Only)

7. Address of principal office

   40 San Miguel Avenue, Mandaluyong City, Metro Manila, Philippines

   Postal Code

   1550

8. Issuer's telephone number, including area code

   [phone]

9. Former name or former address, if changed since last report

   N/A

10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA

    Title of Each Class	Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
    SMC	2,382,265,715
    SMCP1	279,406,667
    SMC2B	90,428,200
    SMC2C	255,559,400
    SMC2D	89,333,400
    SMC2E	134,000,100
    SMC2F	223,333,500
    SMC2G	66,666,600
    SMC2H	164,000,000

    SMC2I

    169,333,400

11. Indicate the item numbers reported herein

Item 9

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

San Miguel Corporation SMC

PSE Disclosure Form 4-2 - Acquisition/Disposition of Shares of Another Corporation

References: SRC Rule 17 (SEC Form 17-C) and Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Consolidation of the Food and Beverage Business of the Company: Transfer to San Miguel Pure Foods Company, Inc. ("SMPFC") of the shareholdings of the Company in San Miguel Brewery Inc. ("SMB")

Background/Description of the Disclosure

The Company will convey and transfer to SMPFC its common shares in SMB and Ginebra San Miguel Inc. ("GSMI") as consideration for the subscription by the Company to additional 4,242,549,130 common shares (the "New Shares") in SMPFC (the "Transaction").

Date of Approval by

Board of Directors Nov 3,2017

Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction

The Transaction is expected to result in synergies in the food and beverage business units of the San Miguel Group, unlock greater shareholder value by providing a sizeable consumer vertical market under the Company, and provide investors direct access to the consumer business of the San Miguel Group through SMPFC.

Details of the acquisition or disposition

Date TBA

Manner

Share swap

Description of the company to be acquired or sold

SMB is primarily engaged in the manufacture and sale of fermented and malt-based beverages, particularly beer of all kinds and classes. SMB sells dominant beer brands in the Philippines, with a total market share by volumes of 90%. SMB also operates the non-alcoholic beverage business of the San Miguel Group.

The terms and conditions of the transaction

Number of shares to be acquired or disposed	7,859,319,270
Percentage to the total outstanding shares of the company subject of the transaction	51.2
Price per share	41.38

Nature and amount of consideration given or received

SMPFC will issue 4,242,549,130 common shares to the Company in exchange for the following: 7,859,319,270 common shares of SMB, and 216,972,000 common shares of GSMI (collectively, the "Exchange Shares")

Principle followed in determining the amount of consideration

The Company engaged ING Bank N.V. as its valuation advisor for the Transaction. The methodology used in determining the valuation of the price per share of SMPFC, SMB and GSMI was discounted cash flow approach, supplemented and validated by reference to industry comparables for similar transactions involving equivalent market-leading peers.

Terms of payment

The Company will convey and transfer to SMPFC the Exchange Shares in exchange for SMPFC issuing New Shares to the Company.

Conditions precedent to closing of the transaction, if any

The closing of the Transaction is conditioned on the approval by the Securities and Exchange Commission of the application for the amendment of the Articles of Incorporation of SMPFC to: expand the primary purpose of SMPFC; reduce the par value of its common shares from Php10.00 to Php 1.00 per share; deny pre-emptive rights to the issuance of additional common shares; and increase the authorized capital stock. The New Shares shall be issued out of the increase in the authorized capital stock of SMPFC.

Any other salient terms

N/A

Identity of the person(s) from whom the shares were acquired or to whom they were sold

Name	Nature of any material relationship with the Issuer, their directors/ officers, or any of their affiliates
San Miguel Pure Foods Company, Inc.	Subsidiary

Effect(s) on the business, financial condition and operations of the Issuer, if any

Upon completion of the Transaction, SMB and GSMI will remain under the San Miguel Group as subsidiaries of SMPFC. SMC will retain control of SMPFC, with an increased ownership interest of approximately 95.9%. SMC will maintain the status of SMPFC as a listed company.

Other Relevant Information

Mr. Eduardo M. Cojuangco, Jr. is the Chairman of the Board of Directors of the Company and GSMI. Mr. Ramon S. Ang is a member of the Board of Directors of the Company (where he is President), SMPFC (where he is Vice Chairman), GSMI (where he is President) and SMB (where he is Chairman). Mr. Ferdinand K. Constantino is a member of the Board of Directors of the Company and SMB. Mr. Francisco S. Alejo III is a member of the Board of Directors of the SMPFC and GSMI. Mr. Menardo R. Jimenez is a member of the Board of Directors of the Company and SMPFC.

Filed on behalf by:

Name	Mary Rose Tan
Designation	Associate General Counsel and Assistant Corporate Secretary