It takes two to tango, as the cliché goes.
But in the case of the proposed merger between government financial institutions Land Bank of the Philippines and Development Bank of the Philippines, the “prey” isn’t likely to go down without a fight, much less dance to the beat of the acquiring bank.
According to the reliable grapevine, the DBP board is opposing the union, in which Landbank is widely expected to be the surviving entity.
But keen observers aren’t necessarily taken by surprise. We earlier reported in this space the baffling detail that DBP president and CEO Michael de Jesus had been appointed in an “acting” capacity. It was the first clue that such a merger—first set in motion two administrations ago—could be pursued.
Although the Department of Finance’s merger proposal is now under review by the Governance Commission for GOCCs (GCG), any planned merger still needs approval from the boards of both banks.
In the past, there were cases when a hostile takeover had been foiled by the management or board of the targeted entity (like how once upon a time, the group of business tycoon Manuel Pangilinan successfully blocked the sale of First Pacific group’s controlling stake in PLDT and Fort Bonifacio project to the Gokongwei group).
But at the end of the day, it depends on how important the unification is to the Marcos administration. Unlike other corporate cases, there’s only one party in control of the two banks here. Malacañang has the final say on policy direction and board composition.
Assuming that a framework acceptable to both banks is drawn up, a government source familiar with the unification plan estimates that operational integration could commence by the end of this year, albeit full integration may take another two to three years.
One former high-ranking DBP official opined, “I think Cecille Borromeo, current Landbank president and former DBP president, has aligned the organizational charts to make the merger easy.”
Now, getting DBP’s “buy-in” is currently the biggest challenge to the supermerger that could create a banking giant with P3.8 trillion assets or as large as—if not larger than —BDO Unibank.