San Miguel Brewery, Inc. (SMB), a majority-owned subsidiary of San Miguel Corporation (SMC), was incorporated on July 26, 2007, two days after the shareholders of SMC approved the transfer of SMC's domestic beer business assets to SMB in exchange for additional shares in SMB. The assets transferred to SMB comprise SMC's domestic beer business' net assets as of June 30, 2007, excluding land, brands and income and other taxes payable. The domestic beer business was spun off from SMC effective October 1, 2007. SMB is primarily engaged in the manufacture and sale of fermented and malt-based beverages, particularly beer of all kinds and classes. The Company is the largest producer of beer in the Philippines with five breweries strategically located across the Philippines and a highly developed distribution system serving 478,757 outlets. SMB's beer brands include San Miguel Pale Pilsen, Red Horse, San Mig Light and Gold Eagle. San Miguel Pale Pilsen, the company's flagship brand, has a history of over 118 years. On February 20, 2009, SMC and Kirin Holdings Company, Limited (Kirin) signed a share purchase agreement for the acquisition by Kirin of a 43.249% stake in SMB. Under the terms of the agreement, Kirin will purchase shares in SMB from SMC at a purchase price of P8.841 per share, for a total acquisition price of P58.9 billion. In this connection, Kirin launched a tender offer to purchase additional shares from all existing shareholders of SMB at the same purchase price offered to SMC. Further to the agreement, SMC, Kirin and the Company will undertake to negotiate exclusively for SMB's potential purchase of shares in SMC's overseas beer business. The exclusivity period is for six months following SMC's offer to sell the shares in its overseas beer business. On April 3, 2009, SMB issued Philippine peso-denominated fixed rate bonds in the aggregate principal amount of P38.8 billion to finance its acquisition of the interests of SMC in the companies into which SMC transferred certain Philippine beer and malt-based beverages brands, including related trademarks, copyrights, patents, and other intellectual property rights and know-how and certain parcels of land on which all of SMB's production facilities and certain sales offices used by SMB for its beer businesses are located. Source: SEC Form 17-A (2008)