Meralco Powergen acquires 100% of Global Business Power

JG Summit Holdings Inc. and Metro Pacific Investments Corp. (MPIC) are consolidating their power businesses under a single entity to increase operational efficiency and create scale.

Based on filings with securities regulators, JG Summit and MPIC inked a deal to sell their combined 86% shareholdings in Global Business Power Corp. (GBPC) to Meralco PowerGen Corp. for P34.4 billion.

With the transfer of JG Summit’s 30% ownership interest and MPI’s 56% stake, Meralco PowerGen’s equity stake in GBPC will increase to 100%.

Payments will be made in installments with 60% of the purchase price expected to be remitted in the first quarter of 2021, while 20 percent will be paid six months after and the remaining 20% after 18 months.

GBPC is the leading power producer outside Luzon with a gross capacity of 1,091 megawatts. The company has assets in the Visayas and Mindanao.

“We are happy with how GBP has performed since our investment in 2016. The challenge now is how to further grow the business and take it to the next level. I am confident that combining this under Meralco where JG Summit is also a significant shareholder is the best way to achieve synergies and create further value”, said Lance Gokongwei, president and CEO of JGS.

For his part, MPIC president and CEO Jose Ma. K. Lim said the move is a “strategic one for MPIC as it presents opportunities in terms of promoting scale and operational efficiency while at the same time streamlining capital for MPIC’s other growth areas.”

“Each of the two parties has complementary strengths and thus together can create a solid and unique platform for strategic growth. The combined group will be in a strong position to respond to the needs of the country as the economy makes a strong rebound in 2021, with the now brighter prospect of available vaccines against the COVID-19”, he added.

Meralco president Ray C. Espinosa said the transaction would allow MGen to focus on its plan to build its own generation portfolio, including owning at least 1 gigawatt in renewable energy capacity in five years.

MGen is a wholly-owned subsidiary of Meralco, where MPIC holds an effective 45.46% interest, while JGS holds a 29.56% interest.

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