After being cleared by the Philippine Competition Commission (PCC), the P18.4 billion deal between Ayala Corporation and Mitsubishi Corporation regarding a 6.5% stake in GCash owner Globe Fintech Innovations Inc. (Mynt) has finally closed, according to a Manila Bulletin business news report.
For the newcomers reading this, the Ayala-Mitsubishi deal was sealed a few months ago and it was perceived that it will likely boost the IPO of GCash.
To put things in perspective, posted below is an excerpt from the business news report of the Manila Bulletin. Some parts in boldface…
The Zobel family’s Ayala Corp. (AC) has closed the sale of a 6.5-percent stake in GCash owner Globe Fintech Innovations Inc. (Mynt) to long-time partner Mitsubishi Corp. for ₱18.4 billion after the deal was cleared by the anti-trust watchdog Philippine Competition Commission (PCC).
In a disclosure to the Philippine Stock Exchange (PSE), Ayala said it has sold half of wholly owned AC Ventures Holding Corp. (ACV) to Mitsubishi. ACV owns about 13 percent of Mynt. Mynt has two financial technology (fintech) companies: G-Xchange Inc., the mobile wallet operator of GCash, and Fuse Lending, a tech-based microlender.
The PCC has cleared the deal after finding that Mitsubishi’s investment in ACV would not significantly reduce competition in the market for QR code-based digital payments to merchants.
The PCC noted in its decision the relatively small market share held by GCash in the provision of QR-based person-to-merchant payments. Additionally, the PCC cited the strong governmental push for interoperability in QR-based payments in the country as a factor in its approval.
Person-to-merchant payments, facilitated by QR codes, enable businesses to accept digital payments from consumers for goods and services.
While Mitsubishi indirectly owns Lawson Philippines, a convenience store chain that accepts QR code-based payments from consumers, the PCC said that its limited presence means the transaction would not result in a substantial lessening of competition.
“Mitsubishi, Japan’s largest trading company, can help Mynt grow overseas and within its own significant Japan-based ecosystem, and in areas like cloud-based payments and new credit algorithms,” Ayala said.
Ayala and Mitsubishi entered into a partnership and cooperation agreement in 1974 that has since featured industrial estates, renewable energy (RE) projects, a water utility, and auto dealerships.
Ayala President and Chief Executive Officer (CEO) Cezar P. Consing said earlier that, “We believe Mitsubishi can add meaningful value to Mynt, which will allow Mynt to deliver significant value to its over 94 million registered users.”
ACV will serve as Ayala and Mitsubishi’s joint venture (JV) entity that will explore consumer-related and digital opportunities in the Philippines.
“These initiatives are aligned with AC’s strategic priority to support the growth of clear business winners within its portfolio,” Ayala said.
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think there will be a series of technological and technical improvements happening with GCash as a result of the closed deal between Ayala and Mitsubishi? How many people in your household are using GCash nowadays?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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