Philippine Airlines, RCBC, Metro Pacific Investments Corp and a few others have all seen significant investments from Japanese firms in recent years.
Over the last few years, Japanese companies have been quietly purchasing significant shares in Filipino corporations. For those in business, it’s more than just identifying opportunities to make more money; it’s a vote of confidence in the potential of Filipino companies, and a stepping stone into wider expansion across the region and elsewhere in the world.
Here are six Japanese companies that have bought sizeable shares in Filipino corporations over the last few years. This is by no means an exhaustive list, only a highlight of some of the most significant acquisitions involving Japanese firms expanding their footprint in the Philippines.
1| Mitsui & Co. and MPIC
2023
Over the last few weeks, one of the biggest news within business circles is the looming delisting of Metro Pacific Investments Corp. The decision came after the company received a tender offer notice from a consortium that includes Metro Pacific Holdings Inc., GT Capital Holdings Inc., Mit-Pacific Infrastructure Holdings Inc., and MIG Holdings Inc.
Prior to this event, Mitsui & Co., one of the largest general trading companies in Japan, announced that it would buy a minority stake in MPIC together with a Japan-backed fund.
In April 2023, Mitsui & Co. and JOIN said it would acquire 20 percent of MPIC for $477 million (about P27.1 billion). Both Japanese firms worked together with existing majority shareholders, including Metro Pacific Holdings Inc., GT Capital Holdings Inc., Mit-Pacific Infrastructure Holdings Inc., and MIG Holdings Inc., to buy out the minority shareholders, which would effectively delist the company from the Philippine Stock Exchange.
According to a statement from the Ty family’s GT Capital Holdings, the action was triggered in part because the groups felt MPIC’s share price has been undervalued. “The Bidders feel that the intrinsic value of MPIC’s core investments in infrastructure in the Philippines has not been fully reflected in MPIC’s share price for some time,” it said.
2| SMBC and RCBC
2022
Sumitomo Mitsui Banking Corporation (SMBC) was already an existing minority shareholder of Rizal Commercial Banking Corporation (RCBC), with about 4.99 percent of the Filipino bank’s total outstanding stock. In November 2022, however, the Japanese bank purchased an additional 382,057,224 of additional stocks for about $460.78 million (about P27.12 billion), which increased its ownership of RCBC to 20 percent.
Back then, RCBC said the transaction was part of its capital raising plan to support long-term sustainable asset growth and investments in technology and cyber security and human resources.
For SMBC, one of the largest banks in Japan and the commercial banking arm of Sumitomo Mitsui Financial Group (SMFG), with the investment in RCBC is in line with its strategy to expand in select key Asian markets, including Indonesia, Vietnam, and India.
3| JERA and AboitizPower
2021
In 2021, JERA Asia Co. Inc., Japan’s largest power generation firm, acquired 27 percent of listed Aboitiz Power Corp. for roughly $1.58 billion (about P89.7 billion). The purchase brought Aboitiz Equity Ventures’ ownership of Aboitiz power down from 77 percent to 51.87 percent.
By participating in the Aboitiz Power business, JERA said it expects to make a positive contribution towards the promotion of clean and renewable energy in the Philippines.
According to JERA, the acquisition was a strategic move not just to enhance JERA’s presence in the Philippines’ energy sector, but to “significantly advance the expansion of clean and renewable energy in the country.”
By 2023, a representative of JERA said the partnership between the two companies is “working very well.”
“This is not a short-term investment,” said JERA senior managing executive officer and Aboitiz Power non-executive director Satoshi Yajima. “This is a long-term investment.”
4| ANA and Philippine Airlines
2019
ANA and Philippine Airlines are both leading names in commercial aviation in Asia. In January 2019, the Japanese airline announced that it would invest $95 million (about P5.4 billion) into PAL Holdings Inc., the parent company of PAL. The purchase—which comes from Trustmark Holdings Corporation, the largest shareholder of PAL Holdings and is owned by the Lucio Tan family—represents 9.5 percent of PAL Holdings’ outstanding shares.
Although the purchase decreases Trustmark’s ownership of PAL Holdings from 86.42 percent to 76.92 percent, it is still the company’s largest shareholder, with ANA Holdings moving to second largest with 9.5 percent.
According to the ANA Group, the decision to acquire ownership in PAL was part of its Mid-Term Corporate Strategy for 2018 to 2022 that involves expanding its international group network, which is considered its main growth pillar. The company also wanted to strengthen its partnerships with foreign airlines to provide further convenience to its passengers.
“This purchase underscores ANA HD’s belief in the dynamism of the Asian region and the great potential of the Philippines’ multi-awarded flag carrier and its confidence that the Philippine air travel market will continue to serve as an economic leader for the ASEAN region,” the company said.
5| Japan Tobacco Inc. and Mighty Corp.
2017
Established in 1945, Mighty Corp is the oldest Filipino tobacco company, manufacturing brands like Mighty, King, and Chelsea. In August 2017, Japan Tobacco Inc. (JTI) said it would acquire the assets of Mighty Corp for about $936 million (about P46.8 billion). JTI, a major player in the tobacco market in Japan, and who owns brands like Camel, Salem, and Winston, said the acquisition was part of its strategy of geographic expansion for sustainable growth.
The same year, JTI purchased the Indonesian Kretek producers Karyadibya Mahardhika and Surya Mustika Nusantara from Gudang Garam for $677 million, while in 2018, it acquired Donskoy Tabak corporation, Russia’s fourth largest cigarette manufacturer for $1.6 billion.
6| Daito and Harbor Star Shipping
2016
Harbor Star Shipping Services is a listed company whose services include harbor assistance, lighterage, towing, ship salvage, marine construction, repair, and maintenance works. In 2016, Daito Corp., a Japanese harbor and marine transportation, and shipping agency services company, said it would acquire a five percent stake in Harbor Star Shipping. The Japanese firm said it also bought into Great Eastern Tug, a non-listed company that also owns a stake in Harbor Star.
Daito Corp said then that the share purchase was so it could “strengthen its business partnership with Harbor Star and contribute to the expansion of the tugboat business in the Philippines, where economic growth remains to be promising.”
As of the end of 2022, Harbor Star Shipping has operations in 11 ports all over the country and provides services to approximately 8,086 ships. It also maintains and manages a total fleet of 62 vessels: 52 domestically and internationally classed tugboats, seven barges, one landing craft tank, one dredger, and one other marine vessel.