Union Bank-Citi Acquisition in PH Cleared by Philippine Competition Commission

The Philippine Competition Commission (PCC) recently gave Union Bank of the Philippines the green light to acquire the consumer banking operations of Citigroup Inc. in the Philippines. A decision, released on April 5, regarding the proposed takeover of Union Bank noted that the move “does not result in substantial lessening of competition in each of the segments of the consumer banking markets.”

A Share and Business Transfer Agreement was entered into by Union Bank and various subsidiaries of Citigroup Inc. in December of last year for the acquisition of the latter’s consumer banking business in the country. This covers Citi’s local credit card, unsecured lending, deposit, and investment businesses, as well as Citicorp Financial Services and Insurance Brokerage Philippines Inc. (CFSI) to aid Union Bank’s expansion into digital banking.

Additionally, around 1,750 of Citi’s employees will likewise be transferred to Union Bank once the transaction has been closed along with Citi’s real estate interests. “Upon review of the findings and recommendation of the Mergers and Acquisitions Office and the Parties’ submissions, the Commission finds that the acquisition by UnionBank of assets of Citibank PH and Citi Square and shares in Citicorp will not likely result in substantial lessening of competition,” stated the PCC’s decision.

“Post-transaction, significant competitive pressures or constraints remain from other banking institutions in the markets for credit card issuance, retail deposits, asset management, and unsecured loans; and no horizontal or vertical overlaps exist in the market for real estate leasing of commercial spaces in Manila, Quezon City, and Pasig,” it added.

This acquisition marks the 204th transaction to be cleared by the PCC, which was prompted following Citi’s consumer banking exit announced in April 2021. It is also the first acquisition of the year after the ₱50-billion merger review threshold was implemented under the Bayanihan to Recover as One Act.

Sources: GMA News, CNN PH