San Miguel Corporation will buy a majority stake in Petron Corporation from the Ashmore Group for about 32.8 billion pesos ($675 million).

This will take place after the British investment company completes a deal with the Philippine government, San Miguel's president said yesterday.

Ashmore is set to increase its stake to more than 90 per cent in Petron, the biggest oil refiner in the Philippines, after agreeing yesterday to buy the government's 40 per cent holding.

The deal will give San Miguel a foothold in the oil industry and comes more than a month after it bought a 27pc stake in utility firm Manila Electric for about $607m as part of a long-standing plan to exit the food and beverage business in favour of heavy industry.

San Miguel president Ramon Ang said the company would buy 51pc of Petron, or about 4.78bn shares, from Ashmore at 6.85 pesos a share, a premium of nearly 43pc over Petron's closing price yesterday.

'Yes, done deal,' Ang said when asked if San Miguel has struck a deal with Ashmore on Petron.

The purchase would be made at the same price, 6.85 pesos, as that agreed by Ashmore and the Philippine government yesterday.

San Miguel later confirmed it had entered into an option agreement to purchase up to 50.1pc of Petron.

Eric Recto, Petron president and one of Ashmore's representative to the company, said there was a deal with San Miguel but he declined to give details.

'My understanding is that they have come to some form of conclusion,' Recto said, adding he was not directly involved in talks with San Miguel.

'The deal will be good for Petron because it is now out of government hands,' said an analyst from a foreign brokerage firm. 'Whether it would be good for consumers is another matter.'-TradeArabia News Service