Aboitiz Equity Ventures Inc : AEV positions banking portfolio for further growth
January 10, 2013 at 11:34 am
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Tuesday, January 8, 2013
Aboitiz Equity Ventures, Inc. (AEV) has positioned its banking portfolio for further growth with the sale transfer of its shares in City Savings Bank (CitySavings) to Union Bank of the Philippines (UnionBank). The two banks are AEV subsidiaries.
Together with its wholly owned subsidiary Pilmico Foods Corporation, AEV owns 99.54% of CitySavings. AEV is UnionBank's largest shareholder, with a 45% ownership.
In a special meeting Tuesday (Jan. 8, 2013), the AEV Board approved the proposed offer of UnionBank to purchase all of AEV's shares in CitySavings.
The purchase of 194,371 combined shares of AEV and Pilmico, which will be paid in cash, will be computed at 2.5x book value as of December 2012, subject to the results of a due diligence review. Total acquisition value is estimated at Php 5.7 billion.
The planned acquisition is also conditional upon UnionBank's obtaining the necessary Monetary Board approval from Bangko Sentral ng Pilipinas.
AEV President & CEO Erramon Aboitiz said, "We believe very strongly that repositioning our financial services portfolio under UnionBank is the right strategic move to optimize value and growth opportunities. We envision UnionBank and CitySavings complementing each other's management strengths, augmenting technological capabilities, and leveraging on each other's financial capabilities."
For his part, UnionBank Chairman & CEO Justo Ortiz said, "Our acquisition of CitySavings is aligned with UnionBank's long-term strategy of building a great retail bank. CitySavings has a business model that gives us a strategic opportunity to expand our customer franchise, and an existing management team we have full confidence in."
After the acquisition, CitySavings will remain as a separate corporate entity, keeping its company name as well as its brand identity of simple and straightforward banking.
CitySavings President & CEO Mikel Aboitiz said, "We are very excited about this development. Increasing our strategic cooperation with UnionBank and combining our unique strengths will enable us to not only accelerate our plans to be the preferred teacher bank nationwide but also provide the next growth leg by expanding into broader civil servant and payroll loans market segments.
Aboitiz Equity Ventures, Inc. is a holding and management company. The Company and its subsidiaries are engaged in various business activities mainly in the Philippines, including power generation, retail electricity supply and power distribution, food manufacturing, banking and financial services, real estate development, and infrastructure. Its segments include power segment, which is engaged in power generation and sale of electricity; financial services segment, which is engaged in banking and money remittance operations; food manufacturing segment, which is engaged in the production of flour and feeds and swine breeding; real estate segment, which is engaged in real property development for sale and lease; infrastructure segment, which is engaged in the production of cement and other building materials and in the supply of treated bulk water; and the parent company and others include the operations of the Company and the service provider subsidiaries that cater to the Group.