Sy family gets PCC nod to divest from leasing unit

MANILA, Philippines — The Sy family received the approval of the Philippine Competition Commission (PCC) to divest the controlling stake of BDO Unibank Inc. in its leasing and finance unit.

The PCC, chaired by former Socioeconomic Planning Secretary Arsenio Balisacan, issued Commission Decision 10-M-012/2020 approving the acquisition by Victor Lim Jr. and Vittorio Lim of shares in BDO Leasing & Finance Inc. (BLFI).

“Upon review of the findings and recommendation of the mergers and acquisitions office and the parties’ submissions, the commission finds that the proposed acquisition by the Lims of shares in BLFI will not likely result in substantial lessening of competition,” the PCC said.

The body said there are no horizontal overlaps between the parties’ respective business activities, pre-transaction and post-transaction.

It said  there would also be no vertical relationships between the parties after the transaction.

“Accordingly, the commission resolves to take no further action with respect to the proposed transaction between the Lims and BLFI,” PCC said.

As of end December, BDO controlled the publicly held leasing and finance firm with an 88 percent stake.

Last January, BDO restructured its leasing business to optimize the financial needs of clients in light of new accounting regulations covering lease transactions.

Lease transactions are less attractive option to corporate borrowers compared to the past as the International Financial Reporting Standards (IFRS 16) that took effect January last year requires leases to be recognized on-balance sheet, similar to a loan facility.

The Sy-led bank’s newly incorporated BDO Finance Corp. would assume current lease transactions to provide continuity to existing clients.

BLFI will be re-named and its articles of incorporation and by-laws will be amended to reflect the new business direction.

As required by regulation, a tender offer will likewise be undertaken by the buyer to provide minority shareholders an opportunity to sell their BDOLF shares.

Last year, BLFI raised P165.5 million after it sold its 40 percent stake in MMPC Auto Financial Services Corp. (MAFS) to JACCS Co. Ltd. MAFS is a joint venture between BDO Leasing and JACCS, Sojitz Corp., and Mitsubishi Motors Philippines Corp. (MMPC) that was established in 2016.

JACCS, Sojitz and MMPC controlled the joint venture company with a 60 percent stake, while BDO Leasing owned 40 percent.