Investing in Philippines: PNB and Allied Bank Merger

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Friday, November 4, 2011

PNB and Allied Bank Merger

Got this news from www.bworldonline.com

Will it lift up PNB's stock price in the near weeks?



PNB, Allied Bank get US Fed’s OK for merger plan


LUCIO TAN banks Philippine National Bank (PNB) and Allied Banking Corp. (Allied Bank) are now turning their attention to local regulators after obtaining the nod of the US central bank of a plan that will finally set their merger into motion.

The two banks, in separate disclosures to the stock exchange yesterday, said the US Federal Reserve Board on Oct. 28 approved the plan to put the entire stake of Oceanic Holding (BVI) Ltd. -- which owns San Francisco-based Oceanic Bank -- in a trust managed by a trustee who will oversee the sale of the stake to third parties.

Anthony Q. Chua, Allied Bank president, in an email said, “the banks would start the process of the merger,” adding, “the banks would now seek the regulatory approvals needed from the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission, the Philippine Deposit Insurance Corp. and the Philippine Stock Exchange.”


He reiterated the merger cannot be completed within the year as “there are many steps to be taken and many requirements to be fulfilled before regulatory approvals can be obtained.”


On Oct. 11, PNB and Allied Bank said their respective board of directors approved the execution of a “voting trust agreement” with Oceanic Holding and the trustee, Walter J. Mix III, to facilitate their long-delayed merger.


The agreement needed the approval of the US Federal Reserve Board.


The agreement will allow Allied Bank to dispose of its indirect stake in Oceanic Bank and push through with its merger with PNB.


Oceanic Holding, where Allied Bank has a 27.8% stake, owns Oceanic Bank.


Allied Bank needs to divest its indirect ownership in Oceanic Bank prior to its merger with PNB given restrictions imposed by the US regulator on the entry of foreign banks to the US. PNB, the surviving entity after the merger, will be considered as one.


“With the approval by the US Federal Reserve Board of the trust agreement, Allied Bank and PNB can now proceed with the implementation of their merger,” Allied Bank said in its disclosure.


The merger will turn PNB into the country’s fourth largest bank in terms of assets.

1 comment:

krissy said...

i think most people have anticipated on a positive light this merger daddy.. ^^ it must have been a long wait and price must have absorbed its impact.. but since it would operationally streamline processes of both companies with the merger, should impact price in the long run ^^ mwah! ♥

Chitika