Union Bank of the Philippines (UnionBank) is set to acquire Aboitiz Equity Ventures’ (AEV) shares in City Savings Bank for an estimated PHP5.7bn ($140m), following the receipt of approval from the AEV board.
AEV holds 45% ownership of UnionBank and 99.54% of CitySavings.
Subject to the results of a due diligence review and Monetary Board approval from Bangko Sentral ng Pilipinas, the purchase involves 194,371 combined shares of AEV and Pilmico computed at 2.5x book value as of December 2012.
UnionBank chairman & CEO Justo Ortiz said, "Our acquisition of CitySavings is aligned with UnionBank’s long-term strategy of building a great retail bank."
Upon completion of acquisition, the acquired enterprise will continue to trade as a separate corporate entity, keeping its company name as well as brand identity.
City Savings provides loans to schoolteachers under the Department of Education’s Automatic Payroll Deduction System.