Asian Journal- The Filipino-American Community Newspaper

MANILA - Beverage, food and packaging group San Miguel Corp. has joined the queue of suitors interested in acquiring the country’s largest and most profitable insurer, Philippine American Life and General Insurance Co. (Philamlife).

“San Miguel will listen to any good deal,” SMC vice chairman and president Ramon Ang told the Philippine Daily Inquirer on Thursday, when asked about the company’s possible bid for Philamlife.

Industry sources earlier said Philamlife had caught Ang’s eye as soon as news broke out that the insurer’s parent firm, the American International Group (AIG), had been rocked by cash woes as a result of the financial meltdown in the United States. AIG later had to get an $85-billion lifeline from the Reserve Bank of New York.

SMC is the fourth local group to officially express interest in AIG’s crown jewel in the Philippines, after the Yuchengco group, the Ayala group and the state-run pension fund Government Service and Insurance System.

SMC is diversifying from its traditional businesses. Its financial advisor, Goldman Sachs, has suggested that it invest in new high-growth businesses, such as power generation or transmission, public utilities, mining, and infrastructure.

SMC has said it is seriously considering investing as much as P35 billion, or roughly $70 million, to develop new engines of growth to further augment the gains it had made with its current core businesses.

The San Miguel group had cash assets of P105.2 billion ($2.2 billion) as of June 30, 2008. It also has an interest in Bank of Commerce.

Acquisition of Philamlife would allow SMC to venture into insurance and fund management, AND also preserve the bulk of the Philamlife workforce, which might be affected if another insurance group were to acquire Philamlife.

AIG has set three criteria for Philamlife’s buyer: It has to have a strong, reputable brand name; it has to be financially sound; and it has to fit Philamlife’s employees and stakeholders into its strategic plans while sustaining Philamlife’s growth potential.