Cathay Financial to acquire 20 pecent stake in RCBC

Manila, Philippines– Taiwan’s Cathay Financial Holding Co. Ltd. is set to acquire a 20-percent stake in Rizal Commercial Banking Corp (RCBC) for P17.92 billion or $400 million.

RCBC said in on Thursday that they selected Cathay Life Insurance Co. Ltd., a unit of Cathay Financial, as the preferred bidder for the proposed acquisition of the 20 percent stake in the bank. This was one of the first of an expected string of deals after Manila relaxed rules for investment in the banking sector.

“We have chosen Cathay Life because they can add value to our business. They are the biggest in life insurance and management and second-largest private bank in Taiwan. But we will provide them access to ASEAN,” said by Lorenzo Tan, RCBC president and chief executive.

RCBC said in a statement that under the proposed acquisition, Cathay will subscribe to 124.340 million new shares of RCBC at P64 per share, for a total consideration of P7.957 billion.

“The parties are working together to negotiate and sign definitive transaction agreements, which include a shareholders’ agreement, a subscription agreement, and sale and purchase agreements,” RCBC said.

Both RCBC and Cathay expect to complete the deal by Dec. 31, 2014.
The Philippine Stock Exchange last week approved the stock rights offering of RCBC.

Doreelyn is a graduate of Banking and Finance at the St Louis University, one of the top 10 universities in the country. Without Doreelyn, Pabaon News will not be complete.Her knowledge of business catapults Pabaon News into another level. Her passion for writing continues to push her to the limit