The mergers and acquisition (M&A) scene in the Philippines is alive and well despite the COVID-19 pandemic and new challenges in the post-election period including the transition to a new administration, skyrocketing inflation, and fears of a global recession.
I learned for instance that MediCard Philippines Inc., among the top three health insurance giants in the country, is exploring a partnership and is getting near to closing the $350 million to $400 million deal.
Prospective partners include big insurance companies and a sprawling listed conglomerate. Who will be the lucky partner? Time will tell and sources say it might be soon.
It would be a good transaction and for MediCard users, hopefully, services will further improve.
MediCard is the only health maintenance organization in the Philippines that was founded and managed by a group of physicians, according to its website.
It was incorporated in December 1986 and formally inaugurated in May 1987 to provide comprehensive healthcare coverage to individuals in Metro Manila as well as in key provincial areas.
Its founders saw how healthcare can be elusive to ordinary people because of limited healthcare programs that could otherwise benefit as many Filipinos as possible.
MVP Group’s MediaQuest and ABS-CBN
Over in the media landscape, the MVP Group’s MediaQuest, the media partner of PLDT and ABS-CBN management are now reportedly a step closer to sealing a deal that would result in a partnership between the two media giants.
The partnership, if it proceeds, would be a 50-50 deal wherein MediaQuest and ABS would have an equal stake in TV5.
Cignal TV, a subsidiary of MediaQuest will also reportedly acquire 100 percent of SkyCable, a Filipino telecommunications company owned by the Lopez Group.
MVP Group chairman Manny Pangilinan, as quoted by Bloomberg last June 4, described the ongoing talks between his team and the ABS-CBN management as “evolving and dynamic.”
He said the partnership between them started in January 2021 after the non-renewal of the ABS-CBN franchise. It has been “mutually productive,” he said. At the same time, he said nothing is definitive yet.
Industry sources said the talks are moving and it is looking to be beneficial for both media giants.
Enrique Razon’s Malampaya acquisition
And then there’s ports and casino tycoon Enrique Razon’s acquisition of a stake in the country’s energy crown jewel, the Malampaya gas-to-power project in offshore Palawan, from Davao-based businessman Dennis Uy.
Industry sources said the consent of PNOC-Exploration Corp. which holds a 10 percent stake in the Malampaya consortium and which is necessary for the deal to push through, is practically in the bag with the Razon Group said to be cooperating in fulfilling all the requirements needed.
His group would now have to work on securing an extension of Malampaya’s operating contract which expires in 2024. The administrations of Noynoy Aquino and Rodrigo Duterte did not extend the contract.
The incoming administration of president-elect Ferdinand Marcos Jr. must act fast on the matter because drillings and exploration activities necessary to find new supply in the facility will take time.
The Malampaya facility is crucial because it supplies at least 20 percent of Luzon’s power requirements. For decades, a consortium led by Royal Dutch Shell operated it until Uy acquired a controlling stake.
Uy’s entry, however, stirred controversies. Critics questioned his capability to run the crown jewel as well as the Department of Energy’s role.
Now here comes Razon who did not hesitate to grab the opportunity. Sources said he even made a counter offer to have Uy’s casinos in Cebu and Clark included in the deal.
Thus, the casinos served as a sweetener to the package which industry sources said amounted to at least $400 million.
Razon’s Prime Infra Holdings has already announced that it is poised to acquire a controlling stake in Uy’s Udenna-led Malampaya project as the acquisition process has already kicked off.
With a looming power crunch in the country, it is important that the issues surrounding Malampaya – which supplies at least 20 percent of Luzon’s power
requirements – are resolved soon.
Data from the National Grid Corporation of the Philippines showed that as of 6 a.m. yesterday, the available generating capacity in Luzon for instance is at 13,181 megawatts while system peak demand is at 11,199 MW. That’s not a comfortable margin especially if one or two major plants bog down.
Outside Malampaya, the government must also ensure that the country would be able to avert a power shortage amid our fragile power situation, aggravated by our aging coal-fired power plants.
The next energy secretary will be a crucial figure in addressing the problem but as of this writing Marcos Jr. has not yet announced who will be the next energy chief.
Iris Gonzales’ email address is eyesgonzales@gmail.com.
Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com