San Miguel eyes $700 mln deal for Coke unit-sources

MANILA, Nov 24 (Reuters) San Miguel Corp., Asia's biggest food and drinks group, has agreed to sell its 65 percent stake in a soft drinks venture with Coca Cola Co. to the U.S. giant for around 700 million dollars, industry sources said.

The sources said officials from both companies had shook hands on the deal, but the Philippines' second-largest listed group said on Friday it was still in talks with Atlanta-based Coca Cola about a sale of Coca-Cola Bottlers Philippines Inc.

(CCBPI).

The statement on Friday did not mention a price.

Coca Cola currently owns 35 percent of CCBPI, which has been suffering from weak sales as consumers turn to noncarbonated drinks like fruit juice and ice tea.

Coke and San Miguel opened talks on their CCBPI holdings early this year. Their five-year bottler's agreement, which covers royalty charges and bottling restrictions on Coke products, ended in July.

Analysts who attended a briefing by San Miguel recently said that a deal would be finalised in January and would involve a non-compete clause that would prevent the Philippine company from selling fizzy drinks in the next five years.

CCBPI had first-half revenue of 19 billion pesos (7.3 million), down 4 percent from a year earlier.

San Miguel A shares exclusive to local investors, were trading down 4.62 percent at 62 pesos on Friday, with the unrestricted B shares up 1.36 percent at 74.50 pesos. The main Manila index rose 0.06 percent.

REUTERS SBA KP0814