Manila, Philippines - The long-delayed takeover by Banco De Oro Unibank of Export Industry Bank (EIB) is expected to be concluded soon.
“All concerned parties including the Philippine Deposit Insurance Corp. (PDIC) are already working on the definitive agreements with the view of concluding this transaction at the soonest possible time,” EIB said in reply to the stock exchange’s query on the status of the acquisition deal.
BDO has already secured PDIC’s consent to acquire EIB’s assets and liabilities. The purchase, when completed, is seen to further solidify BDO’s position as the country’s biggest lender in terms of assets with the addition of EIB’s 50-branch network.
As of end-May this year, BDO had 725 operating domestic branches, 20 international branches and 1,430 teller machines.
BDO earlier said the next stages leading to the eventual acquisition would be agreements on details and the documentation.
EIB was forced to seek financial assistance from the state insurance body in an attempt to rehabilitate the commercial bank. It also sold ownership stakes to foreign fund managers to raise funds.
In the middle of 2010, BDO made a bid for the struggling bank, which was approved by its stakeholders in August. However, some “technical issues” were raised by the PDIC, thus stalling the acquisition.
EIB shares are listed on the local stock exchange but trading had been voluntarily halted to make way for discussions with interested investors.
BDO has grown significantly in the past 10 years through a string of mergers and acquisitions, gobbling up one new bank almost every year.
Among its acquisitions include Dao Heng Philippines in 2001, First e-Bank (2002), Banco Santander Philippines (2003), United Overseas Bank (2005), Equitable PCI Bank (2006), American Express Savings Bank (2007) and GE Money Bank (2010).
EIB, on the other hand, implemented several reforms to improve the bank’s financial condition and make it attractive to investors. For one, it underwent capital reorganization in 2006 to get new funds from investors and existing shareholders.