Holding company SM Investments Corporation (SMIC) paid US$124.5 million to acquire a 34.5% stake in 2GO Group, Inc. through the latter’s majority shareholder and parent company, Negros Navigation Co., Inc. (NENACO).
In a regulatory disclosure, SMIC said it acquired the shares of NENACO for $0.14 per share to “invest in a fast growing, dynamic logistics business.”
SMIC said the shares were acquired from China-ASEAN Marine B.V., a wholly owned unit of the China-ASEAN Investment Cooperation Fund, a Dutch-based private equity fund launched by the China Export-Import Bank. NENACO financed the acquisition of Aboitiz Transport System (ATS) with funds from China-ASEAN Marine. The NENACO and ATS merger eventually was rebranded as 2GO.
SMIC earlier announced it acquired stakes in the integrated transport solutions provider as a means to step into the logistics business.
“We are pleased with this opportunity to invest in a fast growing, dynamic logistics business. It will benefit from, as well as contribute to, the country’s economic progress especially as development spreads to the provinces,” SMIC president Harley Sy said.
The Philippines’ largest integrated supply chain operator, 2GO has businesses in shipping, freight forwarding, warehousing, and express delivery.
SMIC is the holding company of the SM Group of Companies and engages in businesses through its subsidiaries. In retail, it operates through The SM Store, SM Supermarkets, SM Hypermarkets, SaveMore, and Waltermart Supermarket, Inc.; in property through SM Prime Holdings, Inc.; and in financial services through BDO Unibank, Inc. and the China Banking Corporation. It also runs other business operations including Belle Corporation, Atlas Consolidated Mining & Development Corporation, and The Net Group.
The entry of SMIC into 2GO comes after the shakeup in 2GO’s board that led to the resignation of seven members early this year due to “severance of relationship with the group.”
New 2GO board members and officers were elected last February. The change in board membership stemmed from a court battle between Dennis Uy of holding firm Udenna Corporation and 2GO’s parent firms, NENACO and KGLI-NM Holdings Inc., which ended in arbitration.
Udenna is now one of 2GO’s new directors.
