Meralco PowerGen to take over Global Business Power Corp.

Meralco PowerGen Corporation (MGen), a wholly-owned generation subsidiary of the Manila Electric Co. (Meralco), is set to fully acquire and take over Global Business Power Corporation (GBP), a leading power producer outside Luzon.

MGen, which currently owns 14% of GBP, is set to acquire 56% owned by the Metro Pacific Investments Corporation (MPIC) through its subsidiary Beacon Powergen Holdings Inc. The transaction involves 1.077 billion shares, valued at P20.83 apiece, bringing the total to P22.443 billion to be paid in installments.

"This combination 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," said MPIC president and chief executive officer Jose Ma. K. Lim.

"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.

The remaining 30% ownership interest in GBP will be acquired by MGen from JG Summit Holdings Inc. (JGS), involving 577,206,290 shares also at P20.83 per share, to bring the total cost to P12.023 billion.

"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," JGS president and chief executive officer Lance Gokongwei said.

"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," he added.

The transaction will benefit the balance sheet of both MPIC and JGS, and will leave GBP as a wholly-owned subsidiary of MGen.

"With GBP’s operational experience of successfully running its own portfolio of generation assets, coupled with MGen’s own record of managing the first supercritical generation plant in the country, MGen will be better placed to focus on its plan to build its own generation portfolio, including an ambition to own at least 1 GW in renewable energy capacity in five years," said Meralco president Ray C. Espinosa.

Shares in Meralco closed Wednesday up by P0.60 or 0.21% to P282.60 apiece; in MPIC up by a centavo or 0.24% to P4.18 apiece; and in JGS down by P0.80 or 1.11% to P71.20 apiece. — Jon Viktor D. Cabuenas/BM, GMA News