MANILA, Philippines–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, according to a press statement issued by AEV to media companies.
Together with its wholly owned subsidiary Pilmico Foods Corporation, AEV owns 99.54 percent of CitySavings. AEV is UnionBank’s largest shareholder, with a 45 percent ownership.
In a special meeting held on Tuesday, 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 2.5 times 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.”