Antitrust body clears UnionBank acquisition of Citi’s retail business

MANILA, Philippines — The Philippine Competition Commission (PCC) has given Aboitiz-led Union Bank of the Philippines the green light to acquire the retail banking segment of Citigroup Inc. in the Philippines.

In a three-page decision, the antitrust body said UnionBank’s proposed takeover of Citibank N.A. Philippine Branch, Citicorp Financial Services & Insurance Brokerage Philippines Inc. (Citicorp), and Citibank Square Building (Citi Square) is not seen to lead to a substantial reduction in competition in the market.

“Upon review of the findings and recommendation of the Mergers and Acquisitions Office and the parties’ submissions, the Commission finds that the acquisition by UnionBank of assets of Citibank PH and Citi Square and shares in Citicorp will not likely result in substantial lessening of competition,” the commission decision dated April 5 read.

Even after the transaction, the PCC said significant competitive pressures or constraints would remain from other banking institutions in the markets for credit card issuance, retail deposits, asset management, and unsecured loans.

The body explained that there are no horizontal or vertical overlaps in the market for real estate leasing of commercial spaces in Manila, Quezon City, and Pasig.

Earlier, Citigroup said it would exit the consumer banking business in 13 jurisdictions including the Philippines.

Last December, UnionBank announced it entered into a share and business transfer agreement for the acquisition of Citi’s local consumer banking business.

The transaction covers the consumer banking business of Citibank PH, which includes its credit card, retail deposit, personal and unsecured loans, and asset management portfolio.

The acquisition also includes 100 percent of the outstanding capital stock of Citicorp, and real estate interests in Citi Square in Quezon City and its bank branches.

The Aboitiz-led bank is seen shelling out P55 billion for the transaction.

This transaction is also the 204th to be approved by the PCC to date. It is also the first to be given the green light by the PCC for this year after the implementation of the P50-billion merger review threshold under Republic Act 11494 or the Bayanihan to Recover as One Act (Bayanihan 2).

Under the Philippine Competition Act, the PCC is mandated to review mergers and acquisitions that meet the threshold to ensure such would not restrict competition and harm consumer interest.