Commission Decision No. 09-M-006/2020:
In the Matter of the Proposed Acquisition by Lotte Chilsung Beverage Co. Ltd.
of Shares in Pepsi-Cola Products Philippines Inc.

ABSTRACT:

The proposed transaction is the acquisition by Lotte Chilsung Beverage Co. Ltd. of up to 2,134,381,838 common shares of Pepsi-Cola Products Philippines, Inc. equivalent to 57.78% of the total issued and outstanding capital stock of Pepsi-Cola Products Philippines, Inc. through a tender offer to all shareholders of Pepsi-Cola Products Philippines, Inc. other than Lotte Corporation and the members of the Board of Directors with respect to their qualifying common shares and the officers of Pepsi-Cola Products Philippines, Inc. (the “Excluded Shareholders”).

Parties to the Transaction

The acquiring party is Lotte Chilsung Beverage Co. Ltd, a corporation organized under the laws of the Republic of Korea with principal office address in Olympic-ro, Songpagu, Seoul, South Korea. It is a company established in 1967 to engage in manufacturing and selling of soft drink, liquor, fruit/vegetable drink, cereal drink, and food and other beverages. On 21 June 1973, Lotte Chilsung Beverage Co. Ltd. listed its shares on the Korea Exchange. Lotte Chilsung Beverage Co. Ltd. is a subsidiary of Lotte, one of the principal shareholders of Pepsi-Cola Products Philippines, Inc.. As of November 30, 2019, Lotte Chilsung Beverage Co. Ltd. has a total of 7,993,460 common shares issued and outstanding, of which 2,121,660 common shares equivalent to 26.54% of its total issued and outstanding capital stock is owned by Lotte Corporation. Lotte Corporation is the single-largest shareholder of Lotte Chilsung Beverage Co. Ltd. Lotte Corporation is a corporation duly organized and existing under the laws of the Republic of Korea with principal office address in Seoul, South Korea. Lotte Corporation was organized in 1967 to engage in the confectionary, food and beverage, retail, and chemical business. In 2017, Lotte Corporation was formally established through the divestiture and merger of the four (4) public Lotte affiliates. The acquired party is Pepsi-Cola Products Philippines, Inc. It is a Philippine company engaged in the manufacturing, sale and distribution of carbonated beverages, non-carbonated beverages, and snacks in the Philippines. As of November 30, 2019, the authorized capital stock of Pepsi-Cola Products Philippines, Inc. is Seven Hundred Fifty Million Pesos (Php750,000,000.00) divided into Five Billion (5,000,000,000) shares of common stock, with a par value of Fifteen Centavos (Php 0.15) per share, of which Three Billion Six Hundred Ninety Three Million Seven Hundred Seventy Two Thousand Two Hundred Seventy Nine (3,693,772,279) common shares are issued, outstanding and fully paid-up equivalent to Five Hundred Fifty Four Million Sixty Five Thousand Eight Hundred Forty One and 85/100 (Php554,065,841.85).

a) Shares being Acquired and Manner of Acquisition

Lotte Chilsung Beverage Co. Ltd. intends to acquire up to 2,134,381,838 common shares through a tender offer to all shareholders of Pepsi-Cola Products Philippines, Inc. other than Lotte Corporation and the Excluded Shareholders. The common shares target of the acquisition represents approximately 57.78% of Pepsi-Cola Products Philippines, Inc.’s total issued and outstanding capital stock. The tender offer commenced at 9:00am on December 12, 2019 and had been expected to end at 5:00pm on January 15, 2020. However, Lotte Chilsung Beverage Co. Ltd. reserves the right to extend the tender offer period with the approval of the Securities and Exchange Commission.

b) Consideration and Basis for Consideration

Subject to the terms and conditions of the tender offer, Lotte Chilsung Beverage Co. Ltd.will purchase approximately all shares duly tendered at a price of Php1.95 per share, payable in cash (before deductions for the customary selling charges as set out in the terms and conditions of the tender offer, which shall be for the tendering shareholder’s account).

c) Intended Structure of Ownership and Control after Completion

After completion of the transaction, Lotte Chilsung Beverage Co. Ltd. may own up to 3,693,772,270 common shares of Pepsi-Cola Products Philippines, Inc. equivalent to 99.99% of the total issued and outstanding capital stock of Pepsi-Cola Products Philippines, Inc.

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Link: https://www.phcc.gov.ph/https-phcc-gov-ph-commission-decision-no-09-m-006-2020-in-the-matter-of-the-proposed-acquisition-by-lotte-chilsung-beverage-co-ltd-of-shares-in-pepsi-cola-products-philippines-inc/