MANILA, Philippines - The merger of the property units of the SM Group will likely be completed this year, group executive said.
The consolidation of all of SM Group’s property units will allow the company to be more competitive when the Southeast Asian economic integration is implemented in 2015.
“It should be,†SM Investments Corp. (SMIC) vice-chairman Henry Sy Jr. said when asked if the merger would push through this year.
“It is [the merger of] recurring income so it is good in bad times. But during good times you have developmental income. It is a perfect fit for both companies,†Sy said.
In February, SMIC announced that it is studying the consolidation of its mall and property development businesses to create a real estate behemoth that could topple property giant Ayala Land Inc.
The Sy family conducts its property business through SM Development Corp. that handles the group’s residential construction business; property development arm SM Land Corp., mall developer SM Prime Holdings Inc. and Tagaytay-based upscale leisure firm Highlands Prime Inc.
“It is a complete portfolio, good times and bad times together,†Sy said, adding that SM Land would be the surviving entity.
“It is a positive direction and this will be the next generation type of business profile,†said Jose Sio, chief finance officer of SMIC.
Sio said the merger of the property units, and even a potential consolidation of banking units China Banking Corp. and BDO Unibank Inc., would allow the company to be competitive amid the ASEAN integration in 2015.
SMIC continued the trend of posting strong double-digit profit growth amid a robust economy. Its earnings jumped 16.5 percent to a record P24.7 billion last year as revenues climbed 12 percent to P223.9 billion.
In its 2013-2015 plan, SMIC is aiming to grow by another 12 to 15 percent annually that would be supported by the company’s continuous expansion.