More mergers, acquisitions expected this year, says FMIC

By Iris Gonzales (The Philippine Star)
Updated January 10, 2017 – 12:00am
http://www.philstar.com/business/2017/01/10/1661117/more-mergers-acquisitions-expected-year-says-fmic

In a recent briefing, FMIC executive vice president and head of Investment Banking Group Justino Juan Ocampo said key Asian neighbours such as Japan, Taiwan and Korea were looking at Philippine companies they could acquire.

There is particularly strong interest in the FMCG (fast moving consumer goods) and manufacturing sectors, Ocampo said.

“We expect M&A’s to be a continuing thing as a result of scaled up infrastructure projects, and of course because of lower valuations, domestic acquisitions will be attractive for even local acquirers,” Ocampo said.

He said with lower valuations, there may also be a window for consolidation on the domestic front.

Ocampo said cross border transactions would also continue.

“There’s a lot of cross border interest from our neighbors and it’s something that will continue to grow this year. We’ve identified key Asian neighbors like Japan, Taiwan and Korea as strong markets for inbound M&A interest in FMCG and manufacturing,” Ocampo also said.

Among the deals consummated in the first half of 2016 were GT Capital Holdings Inc.’s P8.76 billion acquisition of a majority stake in Profriends, the acquisition by the Pangilinan-led Beacon Electric of a stake in Global Business Power Corp. for P22.10 billion, and Bank of Tokyo-Mitsubishi’s P36.92 billion acquisition of a stake in Security Bank.

FMIC remains confident the Philippine economy will maintain its steady growth until the end of the year and will still be one of the highest performers in the region.

It expects the country’s gross domestic product (GDP) to grow by seven to 7.5 percent driven by higher capital investments as the Duterte administration continues to ramp up infrastructure spending coupled with sound foreign direct investment, strong consumer expenditure, stable OFW remittances and a strong BPO sector.

Inflation, meanwhile, is expected to rise moderately to 2.8 percent to 3.2 percent owing to a rebound in oil prices, strong domestic demand and weaker peso.

FMIC is the investment banking arm of the Metrobank Group. In 2015, the bank successfully completed 19 deals, having participated in 88 percent or P399.14 billion of the total P456.04 billion debt and equity transactions last year.