Aboitiz enters money remittance business
CONGLOMERATE Aboitiz Equity Ventures Inc. has entered the money transfer business by acquiring a majority stake in PETNET Inc., the largest Western Union agent network in the Philippines.
AEV disclosed to the Philippine Stock Exchange on Tuesday a deal to buy 51 percent of PETNET – which has a presence in 2,500 locations nationwide – for a cash consideration of about P1 billion. The acquisition is through the purchase of existing issued shares and subscription to unissued shares.
“We are excited about this acquisition for several reasons. PETNET has a large growth and development potential with the continued increase in remittances from OFWs (overseas Filipino workers) and with a large opportunity to distribute complementary products through an extensive network of outlets. AEV, as new majority owner, can add significant value and boost this development even further,” said Erramon Aboitiz, AEV president and chief executive officer.
Remittances constituted around 8 percent of the Philippine gross domestic product last year and have grown by around 7 percent per year for the past couple of years. The inflow of money remittances has shown resilience to temporary market slowdowns.
“The market for money transfers is a very fragmented market and we see that AEV can add value in PETNET’s strategy to grow and potentially consolidate the market organically. We are also open to potential add-on acquisitions, should it fit strategically,” Aboitiz added.
With AEV’s 51 percent ownership interest, PETNET will continue as a stand-alone business within the Aboitiz Group with the current management team in place, as well as all the existing
shareholders staying with a 49 percent ownership.
“It is our intention to act as a very active owner from a board level perspective, but PETNET
will continue to be a self-driven unit,” Aboitiz noted.
AEV has other interests in the financial industry through banking arms Union Bank of the Philippines and City Savings Bank.
PETNET chief executive officer Larry Ocampo said: “We are excited to have Aboitiz as a strong and supportive new majority owner. PETNET has reached a growth stage where it needs to take some big steps both internally and externally, and we think that AEV is the right active owner to support this development. Personally, I look forward to the opportunity to take the company through this next growth journey in partnership with AEV.”
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