Is Diversification The Wrong Move For San Miguel?

Philippine conglomerate San Miguel Corporation (SMC) is continuing its diversification by acquiring a 'significant stake' in the Private Infrastructure Development Corporation (PIDC) consortium that is constructing a toll highway in the northern Philippines. PIDC, formed of a number of construction companies and led by DMCI Holdings, is constructing the 88km, four-lane Tarlac-Pangasinan-La Union toll expressway at a cost of around US$312.5mn and due to be completed by 2013. Though SMC is predominantly involved in the food and beverage industry in the Philippines, since spinning off its beer division in 2008 SMC has embarked on an aggressive expansion drive into unfamiliar business areas. It has pursued interests in power via stakes in Manila Electric Company, as well as securing an option to buy a stake in oil refiner Petron Corporation. SMC has also entered the telecoms sector

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