SMC to Sell 50-M Coke Europe Shares

June 2, 1998 PSE CIRCULAR FOR BROKERS NO. 1224-98 II. Indicate the item numbers of reported herein: Item 9 SMC TO SELL 50-M COKE EUROPE SHARES The board of directors of San Miguel Corporation (SMC) authorized the company's management today (May 28) to sell 50 million shares out of the 212.3 million shares which San Miguel will receive arising from the spin off by Coca-Cola Amatil (CCA) of its European business into a separate corporation called Coca Cola Beverages (CCB). Coca-Cola Amatil has engaged the services of investment firms SBC Warburg and CS First Boston to run the bookbuilding process for CCB. The bookbuilding process includes a pre-marketing campaign to create demand for CCB shares. The bookbuild itself will match the demand and the supply of CCB shares and establish the initial trading price of CCB shares in their initial public offering. SMC's participation in the bookbuild will be subject to a price range acceptable to the San Miguel board. CCA shareholders voting for the CCB spin-off will also have to approve the acquisition by CCA of the South Korean bottler, and the Central and North Italian bottling operation of The Coca Cola Company (TCCC). The Korean bottler covers a market of 46 million people with a relatively low per capita soft drinks consumption. Its acquisition will strengthen CCA's position as the largest Coke anchor bottler in the Asia Pacific region which serves a market of 340 million people. The Italian operation, on the other hand, spans a market of over 38 million people which is also a relatively underdeveloped market compared to other Western European countries. SMC stockholders, in their annual meeting last month, ratified and approved the planned sale which is consistent with the board's thrust to retain the focus of the company's operations in the Asia-Pacific region. The spin-off, under which CCA retained the Australasian, Philippine and Indonesian operations, will create two organizations that are more sharply focused on the geographical and cultural peculiarities of their respective markets. Meanwhile, CCB handles Coca-Cola operations in Eastern Europe, covering such countries as Poland, Czech Republic, Slovakia, Ukraine, Belarus, Hungary, Croatia, Romania, Slovenia, and later Italy, which are mostly emerging markets. Economies of scale and synergies are also expected to be achieved faster and more effectively within one region than across two. Moreover, the companies will also expand their markets with the planned acquisition of the Korea franchise by CCA and Italy by CCB. Pursuant to the requirements of the Revised Securities Act, the registrant duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SAN MIGUEL CORPORATION By: (SGD.) FRANCIS H. JARDELEZA Senior Vice President-General Counsel & Assistant Corporate Secretary