San Miguel Holdings!?

San Miguel has started and has been continually transforming itself  from being one giant organic San Miguel corporation into a holding company. San Miguel has become a parent over several subsidiaries such as San Miguel Breweries, San Miguel Foods, San Miguel Beverages, San Miguel Packaging, Petron, Liberty Telecoms, a big share in Meralco and many other small firms. This activity of San Miguel has positioned itself into becoming the Philippines’ biggest holding company, taking over the title that Ayala corporation has enjoyed for over a century according to some analysts.

A holding company is a company that acts as a parent among group of companies which are called subsidiaries (usually belonging to different industries). The Parent company would need to have at least the majority shares of the subsidiary for it to be fully controlled and be part of the holding company. The parent company doesn’t do any of the production of goods and services, what it does is just to make sure it has effective control and management of its subsidiaries. But in essence, a subsidiary is autonomous from the parent when its financial and fundamental infrastructures are concern. Apparently, this is the path San Miguel’s management wants it to be.

One good thing for a holding company is flexibility. Since the nature of a holding company is just to hold shares of its subsidiaries. It could have a leeway to position its investments in important profitable industries and it could most importantly react faster in saving its investment in subsidiaries that will incurr losses by selling them away.  

 Let’s just see how things would work out for San Miguel.