Two of the biggest companies in the Philippines, PLDT and San Miguel are locked in a battle over which one gets to control MERALCO.
The government, through the GSIS has an acrimonious relationship with the Lopez family that controls Meralco, and this latest news in the corporate world is very much tainted with the political affairs of the nation.
Electricity rates are among the most hotly-debated and sensitive topic in the country, and if the government can take control of this distribution utility and manage it to fit nicely with some political agenda, then election results can easily be secured.
I do not think, however, that government really wants to run Meralco. God knows how inefficient government is in running companies. It just wants significant influence in the company and may probably engage professional managers to run its affairs. It's too important to be made as a milking cow by the First Gentleman.
You see, Gloria and her government have serious image problems. The corruption allegations alone are staggering. Taking over Meralco and playing around with electricity rates so it could win votes is a very plausible motive why all these things are happening.
And so the obvious strategy? In October last year, GSIS divested all its shares in Meralco and sold it to San Miguel, upon which the company started amassing additional shares until it reached 38%.
Faced with this looming hostile take-over from San Miguel, the Lopezes sought the help of PLDT's top honcho Manuel Pangilinan. PLDT bought Meralco shares on its own to combine it later on with the Lopezes' so that ostensibly, the family remains firmly in control of the company.
As for talks about synergies, yeah right. Sure, PLDT and Meralco can leverage on each other's existing facilities, but I do not think that was the over-riding factor here. Meralco will not gain much operationally from the alliance. To begin with, the Lopezes already own Bayantel, a PLDT competitor. But Bayantel is debt-ridden and insignicant in the telco industry. It will just be a redundant company in PLDT's portfolio, much like Piltel. Clearly, this is just a case of defending the Lopez family's control over Meralco.
The Lopezes realized that PLDT would be in the best position to help the family ward off the hostile take-over by the government through San Miguel, because Pangilinan steered Metro Pacific in the late nineties to acquire PLDT via a similar tactic, a hostile take-over bid with the GSIS shares as the obvious starting point to take over the company.
In addition, PLDT's unrivaled position in the era of cell phones and broadband internet means that it can afford to downplay, ignore and even fight political pressure from Malacanang.
As for San Miguel and Meralco, the synergies are even less clear: a food company investing into electricity distribution? Correct, San Miguel is simply allowing itself to be used as a conduit for the government to take control of Meralco.
When Gloria was seen visiting the San Miguel corporate head quarters, (instead of San Miguel officers visiting Malacanang) it clearly shows the government is asking San Miguel a really, really big favor.