DoubleDragon acquires 35% MerryMart stake for P1.28 billion

MANILA, Philippines — DoubleDragon Corp., the listed company owned by Edgar “Injap” Sia II and Tony Tan Caktiong, is entering the essential retail space with the acquisition of a 35-percent stake in MerryMart Consumer Corp. for P1.28 billion.

DoubleDragon said that its board approved the acquisition of 2.66 billion common shares of MerryMart, a company owned by Sia, at P0.48 per share based on the 30-day volume-weighted average price of MerryMart shares.

The transaction will be paid 50 percent using DoubleDragon shares as payment, also valued using its past 30-day volume-weighted average price of P9.30 per share and 50 percent in cash, amounting to P637.97 million.

DoubleDragon is required to conduct a mandatory tender offer of the shares of MerryMart held by its remaining shareholders at the same valuation, subject to final regulatory approvals.

The acquisition of MerryMart is expected to complement the ecosystem of DoubleDragon, a Triple-A credit rated company with total assets of over P190 billion.

MerryMart generates over P7 billion recurring revenues annually mainly from essential retail such as grocery and pharmacy as well as other consumer related businesses.

MerryMart Group’s various formats are MerryMart Express, MerryMart Market, MerryMart Grocery and MerryMart Wholesale.

The company has a goal of reaching 1,200 branches nationwide by 2030, generating P120 billion in systemwide recurring consumer sales revenue.

“Given MerryMart Group’s various formats in retail and wholesale as well as its pharmacy subsidiaries who are major pharmacy players in Quezon-Luzon and Zamboanga-Mindanao, and its dominant grocery business in Capiz province, the acquisition of the MerryMart Group is expected to create longterm value and synergy to DoubleDragon Group,” DoubleDragon said.

Further, the acquisition is in line with the transition of DoubleDragon into an investment holding company.

In April 2021, the company officially changed its corporate name from DoubleDragon Properties Corp. to DoubleDragon Corp. and amended its articles from a real estate company into an investment holding company.

The MerryMart Group will add value to the existing investment portfolio of the DoubleDragon with its chain of provincial community malls, office buildings, warehouse complexes and hotels mainly through its asset-light Hotel101 business.

The move is also in line with DoubleDragon Group’s 2035 goal to reach P500 billion in revenues.

“It’s a way for DoubleDragon to diversify its investment portfolio. Right now, their holdings are highly concentrated in real estate. Taking a substantial stake in MerryMart will give them exposure to the consumer retail business. On the other hand, MerryMart will benefit from the financial, management, and strategic support of DoubleDragon,” China Bank Capital Corp. managing director Juan Paolo Colet said.