MANILA, Philippines - San Miguel Corp. will sell up to 40% of its food subsidiary to raise more funds for its ambitious diversification strategy, repeating a similar move in its brewery business in 2009.

The plan also involves selling food brands and other intellectual property to unit San Miguel Pure Foods Company, Inc. to raise P3.2 billion. The food and beverage conglomerate will also sell its 51% stake in San Miguel Pure Foods Investment, Ltd. (BVI) to overseas unit San Miguel Pure Foods International, Ltd.

The sale of up to 40% in San Miguel Pure Foods will be “by way of a trade sale or a marketed placement to investors, which may include investors outside the United States or and to not more than 19 non-qualified buyers domestically to be determined by management.”

An analyst said the move would allow San Miguel to fast-track diversification plans by focusing on more profitable industries.

“All we can say there is that is in line with their plans to diversify out of slow-growth business to faster-growth industries,” April Lee-Tan, head of research of online brokerage CitisecOnline.com, said in a phone interview.

San Miguel Pure Foods will declassify common shares and increase its capital by P1 billion equivalent to 100 million shares at a P10.00 par value, from the current P5.206 billion.

The San Miguel board has also approved the “potential issuance of up to 75 million new [San Miguel Pure Foods] shares to San Miguel or third parties.” San Miguel said it would have the right to potentially buy up to P5.2 billion worth of new San Miguel Pure Foods shares.

San Miguel declared a cash dividend yesterday of P0.35 per share payable on March 8 to all stockholders on record as of Feb. 19.

The conglomerate has diversified into heavy industries like power, infrastructure, oil and telecommunications.

San Miguel shares dropped to P70.50 apiece on Tuesday from P71.00 on Monday while San Miguel Pure Foods shares were last traded at P55.00 apiece on Jan. 7.