Billionaire Enrique Razon Jr.’s International Container Terminal Services Inc. (ICTSI) is increasing its stake in Manila North Harbor Port Inc. to 50 percent—a deal that would make ICTSI the single largest shareholder in the country’s biggest domestic port.
The firm, which has operations in dozens of locations in the Philippines and around the world, said in a filing to the Philippine Stock Exchange on Thursday it agreed to buy an additional 15.7-percent stake in Manila North Harbor for P910 million.
According to ICTSI, the cash deal was sealed with Harbour Centre Port Terminal Inc., a company led by businessman Reghis Romero II.
It is the latest act of consolidation in the industry. Big groups such as SM Investments Corp., Ayala Corp. and Metro Pacific Investments Corp. have taken key positions in the logistics sector, betting that an expanding economy would lead to more robust trade.
ICTSI noted in its filing its larger exposure in Manila North Harbor would bolster operations as well as ease traffic conditions around the port area.
The deal, however, would still need the approval of the Philippine Ports Authority and the Philippine Competition Commission.
Christian R. Gonzalez, who heads ICTSI’s Manila International Container Terminal (MICT) and its operations overseas, said the transaction would “significantly” lower costs for certain customers, such as the trucking costs between the Manila North Harbor and MICT.
ICTSI chief financial officer Rafael D. Consing Jr. explained congestion around Manila North Harbor and MICT would also be reduced as the two facilities open up private access points between their properties.
ICTSI also said it planned to pour in additional investments into Manila North Harbor.
Once the transaction is complete, ICTSI will own 50 percent of Manila North Harbor, followed by conglomerate San Miguel Corp., which owns about 43.3 percent. Minority shareholders include the group of businessman Iñigo Zobel, who is also a director of SMC.
ICTSI first entered Manila North Harbor in October 2017 after it bought the 34.8-percent stake of SMC subsidiary Petron Corp. for P1.75 billion.