The Securities and Exchange Commission (SEC) has approved the merger between Philippine Resources Banking Corp. (PR Savings) and City Savings Bank Inc., a wholly-owned subsidiary of Union Bank of the Philippines (UnionBank, PSE: UBP). PR Savings, a thrift bank, is 100% owned by City Savings.
The merger between both banks is in line with UnionBank’s goal to expand its mass market reach consistent with its vision to promote inclusive growth in the country.
On December 29, 2017, UnionBank disclosed the execution of the Share Purchase Agreement (SPA) between City Savings and the owners of the common shares of PR Savings. Also, on February 23, 2018, it disclosed the SPA between City Savings and the International Finance Corp. (IFC), the owner of 65,000,000 preferred shares in PR Savings.
In the SPA, one of the conditions precedent for the closing of the transaction is the approval of the BSP of the acquisition of the common shares of PR Savings Bank and the subsequent merger between City Savings and PR Savings Bank with City Savings as the surviving entity.
On June 20, 2018, City Savings received a Letter from the Bangko Sentral ng Pilipinas (BSP) dated June 19, 2018 informing PR Savings and City Savings of the following: (1) BSP’s approval of the equity investment of City Savings in PR Savings Bank through the acquisition of 100% of the issued and outstanding common shares of stock in PR Savings Bank; and (2) BSP’s approval-in-principle of the merger between City Savings and PR Savings Bank, with City Savings as the surviving entity.
Considering that all the conditions precedent to closing of the above transactions have been complied with by the parties, UnionBank likewise made the appropriate disclosures on the closing of the acquisition of 100% of the common shares and the preferred shares in PR Savings closed on June 27 and 28, 2018, respectively.
Thereafter, on July 18, 2018, the PR Savings and City Savings filed the application for the approval of their merger with the BSP. On December 27, 2018, City Savings received a Letter from BSP informing its formal approval of the merger between PR Savings and City Savings, with City Savings as the surviving entity.
In the interim, the PR Savings and City Savings likewise filed the application for the approval of their merger with the SEC.
On 4 March 2019, City Savings received the Certificate of Filing of the Articles and Plan of Merger dated 28 February 2019 from the SEC whereby the latter approved the merger of PR Savings and City Savings.
The transaction is an upstream merger of PR Savings to City Savings as the latter owns 100% of the former. As per BSP’s letter dated December 27, 2018, the merger between PR Savings and City Savings should be completed on December 27, 2019.
The SEC approved and made effective on 28 February 2019 the merger of PR Savings and City Savings.