San Miguel Corp., the Philippines’ largest company, expects to complete the sale of a controlling stake in Bank of Commerce to Malaysia’s CIMB Group Holdings Bhd. (CIMB) in about month.
“An agreement was reached last night and the deal is closing in 30 days or so,” San Miguel President Ramon Ang told reporters today in Manila after the company’s annual meeting. “It will be under the same terms as the previously agreed.”
CIMB, Malaysia’s second-biggest lender, agreed in May 2012 agreed to buy 60 percent of Bank of Commerce from San Miguel and other shareholders for 12.2 billion pesos ($283 million). The deal would bolster the Kuala Lumpur-based lender’s expansion in Southeast Asia and help San Miguel raise funds for its other business ventures, including Philippine Airlines Inc. and oil refiner Petron Corp. (PCOR)
“Now is a good time to enter the Philippine banking sector given the robust economic outlook for the country,” Charles Ang, an analyst at COL Financial Group Inc. (COL), said by phone. “In case a deal with CIMB doesn’t happen, a lot of local banks -- especially those who are in the midst of branch expansion -- should be open to acquisitions.”
The Philippines is defying a regional slowdown as President Benigno Aquino boosts investment and state spending. The nation’s economy grew 7.8 percent in the three months ended March from a year earlier, the fastest expansion in almost three years, the government reported on May 30.
San Miguel on May 15 confirmed comments Ang made to the Philippine Daily Inquirer, saying he would know within a week whether to proceed or scrap the deal with CIMB. The newspaper reported a day earlier that the country’s laws restricting foreign ownership of real estate have become a hurdle for the deal, citing unidentified people.
San Miguel fell 2.1 percent today as the Philippine benchmark (PCOMP) stock index declined 4.6 percent. CIMB dropped 1 percent.
Bank of Commerce is the 17th-biggest lender in the Philippines with assets of 92.7 billion pesos at the end of last year, according to central bank data.
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