The Headline-Making Business Deals of 2018
Big businesses have had quite an appetite for acquisitions this year. Despite the volatile market conditions outside our shores (no thanks to Trump and China), local and even regional business players have had a good year of deals.
Here are some that have made the headlines in 2018.
The multimillion Uber-Grab merger
In an unprecedented move, ride-hailing rivals Uber and Grab combined their Southeast Asia operations for a multimillion-dollar deal in March. By the next month, Uber was offline in all of its eight locations in the region, including the Philippines, as if they never pioneered the business in the country.
The deal, which let US-based Uber acquire a 27.5-percent stake in Singapore’s Grab, continues to make headlines as anti-trust bodies in the region hound the companies with penalties for their anti-competitive violations.
In September, the two companies were slapped with a $9.5 million fine by the Competition and Consumer Commission of Singapore. A month later, the Philippine Competition Commission (PCC) fined the two firms with Php16 million. The merger has been deemed a threat to the industry everywhere, but most especially in the Philippines, where there is no big enough ride-hailing company that can stand against Grab’s market domination.
SM’s minority stake in Goldilocks
After getting cold feet by the deal in early 2018, SM Investments Corp., the country’s largest retailer, went ahead with the 34-percent stake acquisition in bakeshop and restaurant chain Goldilocks Bakeshop Inc. in August.
The Sy-led conglomerate was supposed to buy a majority stake in the bakeshop chain but seem to have been discouraged by the numerous conditions of the PCC, which includes a five-year monitoring period by the anti-competitive body.
Jollibee's acquisition spree
In its race to become one of the top five largest fast-food chain groups in the world by 2020, Jollibee Foods Corp. (JFC) fattened up its portfolio this year to make sure it keeps on track to reach that goal.
In May, JFC’s international unit Jollibee Worldwide Pte. Ltd. invested around Php1.74 billion to the franchise holders of the Tim Ho Wan brand in the Asia-Pacific, making the company the region's sole franchise owner of the internationally acclaimed dim sum chain.
The investment was made to private-equity fund Titan Dining LP, which holds the license to own and operate the Tim Ho Wan brand in Cambodia, Indonesia, Japan, Macau, Taiwan, Thailand, Vietnam, Australia, and the Philippines.
In September, the homegrown fast-food chain also entered in a $12.4-million deal with US-based Mexican food concept Tortas Frontera LLC, giving JFC a 47-percent stake in the American restaurant chain. JFC Chairman Tony Tan Caktiong said its latest acquisition would help the Asian firm tap what he called the “fast-growing” Mexican food category in the U.S., as it hopes to grow its stronghold in the country.
Months later, the company announced it has completed its acquisition of American chain Smashburger after raising its stake from 85 to 100 percent. The brand has 351 stores worldwide, but most are found in the U.S.
But even with its acquisition spree, JFC’s strongest business unit remains to be its core brand: Jollibee. This year, the fast food brand opened stores in Milan, Toronto, London, and Manhattan.
Dennis Uy's shopping list
Even with all those deals and mergers, there is probably no other businessman that has made the headlines the most in the past two years as Davao-based tycoon Dennis Uy. For 2018, he started the year by completing his 100-percent buyout of convenience store chain FamilyMart for an undisclosed amount in January. The business was seen to complement his gas station chain business, Phoenix Petroleum.
For a while, the known Duterte supporter remained quiet, until the next half of the year hit when he announced deals almost every month.
In August, Dennison Holdings Corp., a company owned by Uy, bought a 45-percent stake in listed firm ISM Communications Corp., a transaction worth Php1.28 billion. The buyout sparked talks on Uy’s interest in the third telecommunications bid but for weeks, his camp remained mum.
During the period, Uy still went on a shopping spree, acquiring a 70-percent stake in restaurant and bakery chain Conti’s in September and becoming a significant partner in Autostrada, the official dealer for Ferrari in the Philippines in October.
By November, Uy had the sweetest deal of all.
The consortium won against Sear Telecommunications, a consortium led by Mindanao-based TierOne Communications Inc. and former Ilocos Governor’s Luis “Chavit” Singson’s group of companies and local telco firm Philippine Telegraph and Telephone Co. (PT&T), the only two other contenders who participated in the bidding process.
The thin list of participants was a surprise to most especially when there were at least 10 parties that bought bidding documents from the Department of Communications Technology. In the end, it was only Mislatel that submitted complete documents to the DICT, making them the winners of the bidding process.