CIMB scraps San Miguel deal — report

MANILA, Philippines – Malaysia’s CIMB Group Holdings Bhd is no longer pushing through with plans to purchase majority stake in Bank of Commerce (BOC), the banking unit of San Miguel Corp, the Philippines’ biggest business group.

In a disclosure to Malaysia’s stock exchange on Friday, June 21, CIMB, Malaysia’s 2nd largest bank by assets, said the parties failed to reach a deal even after discussions were extended when the agreement lapsed.

“As such, the parties will not proceed with the proposed acquisition,” CIMB said.

San Miguel president and COO Ramon Ang had said the Philippine group has already finalized a deal with their Malaysian counterparts on June 10. 

San Miguel signed a memorandum of agreement in 2012 to sell 58% of BOC to Malaysia’s second-largest lender for about P12 billion.

The deal could have been strategic for both parties. It would have allowed CIMB entry to the Philippine banking industry, and San Miguel could have raised money for its expansion.

The parties had eyed to complete the transaction in January, but issues related to BOC’s real estate assets delayed the deal’s closure. Foreigners are not allowed to own land in the Philippines.

In May, San Miguel confirmed a report that said CIMB wanted it to invest in a realty company where BOC’s assets would be transferred to.

BOC is the Philippines’ 16th largest bank in terms of assets. It operates 122 branches and 300 automated teller machines across the country.

CIMB earlier said the bank’s addition to its portfolio would strengthen its position in the region.

CIMB has about $98 billion (P4 trillion) in assets, more than the combined assets of the top 3 Philippine banks.

San Miguel acquired control of BOC in 2009, two years after it announced it was going into high-growth and high-risk sectors like energy, mining, telecommunications and infrastructure. – Rappler.com