Philippine conglomerate Ayala Corp. is readying for a slew of mergers and acquisitions to expand its business, with the Southeast Asian economy projected to grow by around a third in the next five years, according to its chief executive officer.
(Bloomberg) — Philippine conglomerate Ayala Corp. is readying for a slew of mergers and acquisitions to expand its business, with the Southeast Asian economy projected to grow by around a third in the next five years, according to its chief executive officer.
“We’re prepared to be opportunistic” on M&A, Ayala President and CEO Cezar Consing said in interview with Bloomberg Television’s Haslinda Amin and Rishaad Salamat on Thursday. “For a host of reasons – capital reasons, generational issues, market dynamics, we expect there to be M&A opportunities over the next few years.”
Although mergers and acquisitions in the Philippines have been relatively slow in the last few years, these are likely to pick up. “And I want to make sure that we have the M&A capability in-house. We use some of the best M&A advisers in the world, but it’s always good to have some of the M&A capability in-house,” Consing said.
This year, the country’s oldest conglomerate aims to complete a multi-year plan to raise $1 billion from asset sales and reinvest the money in its businesses. Renewable energy subsidiary ACEN Corp. will probably need more capital from the parent firm given its growth potential, he said.
Ayala, which has interests in banking, property, energy and telecommunications, will be looking at sectors where it already has exposure even as it’s prepared to also consider new businesses.
The Philippine economy expanded 6.4% in the first quarter from a year ago, boosted by consumer demand. Although the pace was slower than the 7.6% full-year growth in 2022, which was the fastest in almost half a century, the country is poised to remain a bright spot in a world facing risks from rising borrowing costs.
Should the economy grow by 6%, the low-end of the government’s 6%-7% target, annually through five years, it will be 33% bigger than it is now, he noted. “That’s growth that we would like to take advantage of,” Consing said.
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