UNION BANK of the Philippines, Inc. (UnionBank) has entered an investment agreement with the ATR Asset Management Group (ATRAM Group) for the merger of their trust units, the listed lender announced on Monday.
Under the deal approved by its board of directors on Nov. 7 and finalized on Nov. 8, UnionBank will acquire a 27.5% stake in the ATRAM Group’s ATR Asset Management, Inc. (AAMI) and will sell 100% of its shares in its stand-alone trust subsidiary UnionBank Investment Management and Trust Corp. (UBIMTC) to AAMI, it said in a disclosure to the stock exchange. The ATRAM Group will retain its 72.5% majority stake in AAMI.
The transaction will result in the merger of UBIMTC with ATRAM Trust Corp. (ATC), with the latter as the surviving entity.
“This merger aims to leverage the strengths of both organizations, creating a robust platform for growth and innovation in the asset and wealth management sector,” UnionBank and ATRAM Group said in a joint statement.
“The merger will create a leading player in the trust industry with combined assets under management of over P485 billion based on the latest data, significantly increasing scale and capabilities. By integrating UnionBank’s digital expertise with ATRAM’s innovative asset management solutions, the partnership aims to provide clients with a diverse range of high-quality financial products,” they added.
Under the agreement, UnionBank will buy 82,972,356 in AAMI common shares at P3.61 each or P300 million in total. Broken down, it will pay P67.5 million to ATR KimEng AMG Holdings, Inc. for 25,000,000 common shares in AAMI and P232.5 million to AAMI for the remaining 57,972,356 shares.
Meanwhile, the bank will sell 300,000,000 UBIMTC common shares to AAMI for P1 apiece or P300 million.
The transaction is subject to regulatory approvals. AlphaPrimus Advisors acted as financial advisor to the ATRAM Group, while Exchange Equity Partners served as financial advisor to UnionBank.
“This partnership allows us to strengthen our offerings and provide even more tailored services to our customers, especially our larger Wealth client base as a result of the acquisition of Citibank Philippines’ consumer banking business. We are committed to ensuring they have access to the best financial solutions available while also creating broader career opportunities for our employees in a larger and very dynamic organization,” UnionBank President and Chief Executive Officer Edwin R. Bautista said.
“This merger represents a milestone for ATRAM as we align with UnionBank, a leader in digital innovation. Together, we will change the game and redefine the asset management landscape in the Philippines. Our clients will benefit from an expanded suite of investment solutions, enhancing the value and service we deliver,” ATRAM CEO Michael V. Ferrer said.
The ATRAM Group last month signed a deal to purchase the 70% stake of Metrobank Group’s investment banking arm First Metro Investment Corp. in First Metro Asset Management, Inc.
UnionBank’s net income rose by 76% year on year to P3.5 billion in the third quarter, bringing its nine-month net profit to P8.56 billion.
Its shares closed unchanged at P37.45 each on Monday. — A.M.C. Sy
