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SMC studying Metro Pacific’s Indonesian tollway assets for merger

SAN MIGUEL CORP. (SMC) said it anticipates finalizing the planned joint venture with Metro Pacific Investments Corp. (MPIC) in the coming months, pending the evaluation of its tollway arm’s Indonesian assets. 

“We will finalize this very soon, maybe in the next few months. The reason why I cannot say ‘yes’ entirely is we need to evaluate the Indonesian tollway, but Indonesia’s economy is very promising,” SMC President and Chief Executive Officer Ramon S. Ang told reporters last week.

SMC and MPIC have been in discussions regarding a possible joint venture for a toll road business.

MPIC Chairman, President and Chief Executive Officer Manuel V. Pangilinan is hoping to complete and publicly list the planned merger with SMC within the year.

“It will be a significant company in the Philippines with starting EBITDA (earnings before interest, taxes, depreciation, and amortization) of around P50 billion,” he said in February.

The valuation of the planned joint venture company also includes Metro Pacific Tollways Corp.’s (MPTC) Indonesian assets. 

MPIC’s tollways unit MPTC, through Metro Pacific Tollways Asia, holds 76.31% share in PT Nusantara Infrastructure in Indonesia. 

PT Nusantara Infrastructure owns infrastructure concessions in both the western and eastern portions of Indonesia. It operates businesses in transportation, toll roads, communication, and distribution networks.

In 2019, MPTC announced that it had purchased a significant share of PT Jasamarga Jalanlayang Cikampek, the concessionaire of the Sheikh Mohamed Bin Zayed Elevated Toll Road, which is a 38-kilometer flyover aimed at decongesting traffic in Jakarta.

“I think the Indonesian tollway [assets] should be good, but as I have said, I do not know the details. We cannot agree on something we don’t know,” Mr. Ang said. 

Among the considerations and issues being evaluated for the possible merger is that both companies will have to go to Congress to apply for a franchise for their operations, according to MPIC’s Mr. Pangilinan.

Mr. Ang said he is confident that securing the necessary approvals from the government will not be a problem for the two parties.

“For as long as your intentions are good, it  will be easy to put forward in Congress,” he said.

MPTC has announced that it is deferring its initial public offering plans to 2025 as the company weighs its options to form a joint venture with SMC.

MPIC is one of the three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

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