Philippine firms are on an unprecedented global shopping spree, spending billions of US dollars on everything from vineyards to food manufacturers and casinos, reflecting the nation’s recent economic rise.
A combination of strong domestic growth, bargain prices in retreating economies abroad and rock-bottom borrowing rates have fueled the acquisitions, analysts said.
The Southeast Asian nation has, for years, exported shopping malls and junk food to the region, but cashed-up Philippine firms have diversified in recent years with acquisitions around the world and in many sectors.
Photo: AFP
“It has not happened in this rapid succession. It is like a colonial mentality in reverse,” said Luis Limlingan, research head at Manila stock brokerage Regina Capital Development Corp.
In one of the most-recent big-ticket acquisitions, local instant noodle firm Monde Nissin Corp last month said it was to buy British meat substitute manufacturer Quorn Foods for ￡550 million (US$833 million).
In the past two years, the private company also snapped up popular fruit juice brand Nudie and chilled dips manufacturer Black Swan, both from Australia, for undisclosed amounts.
Monde Nissin is owned by Betty Ang (洪美智), who started her company 30 years ago and is now the nation’s 19th richest person with a net worth of US$900 million, according to Forbes.
Emperador Inc, a company controlled by the Philippines’ fourth-richest man, Andrew Tan (吳聰滿), and which specializes in cheap brandy at home, is looking to spend more than US$1 billion on diversifying in Europe.
In May, the company said it would bid to acquire French cognac maker Louis Royer SAS.
There has been no resolution in that attempt yet, but last year it paid ￡430 million for Scottish whisky maker Whyte and Mackay.
Emperador last year spent 60 million euros (US$82 million) on acquiring half of Spanish brandy producer Bodega Las Copas.
The Philippines’ third-richest man, Enrique Razon, has made headlines by expanding on the port operator business that has made him his fortune by setting his sights on the Asian gaming market.
He opened a billion-US dollar casino in Manila in 2013, and then in March this year, his Bloombery Resorts firm announced it was buying an island and part of another one in South Korea for his first overseas gaming foray.
Analysts said these were some of the highest-profile acquisitions overseas, but there were many others in a wide range of sectors, including telecommunications, power, fast food and oil.
Philippine firms are leveraging their earnings from a robust local economy to snap up bargains in nations where growth has slowed, analysts said.
“These companies have huge stashes of cash and they are maximizing it to compliment their existing businesses,” First Grade Holdings Inc managing director Astro del Castillo said.
In recent years, the Philippines’ economy has been one of the strongest in Asia, averaging growth of 6.3 percent between 2010 and last year. Philippine President Benigno Aquino III, whose six-year term ends next year, has been widely credited overseas for the economic gains due to his efforts to tackle graft and stifling government bureaucracy.
This year, the economy has slowed, but still expanded by 5.3 percent in the first half.
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