British auto giant Inchcape to acquire 60% of local Mercedes-Benz distributor CATS

British automotive distributor Inchcape Plc is forming a joint venture with Philippine luxury vehicles distributor CATS Group, with the acquisition of a controlling stake in the local vehicles retailer.

CATS Motors, distributor of Mercedes-Benz in the Philippines, announces partnership with global multi-brand automotive distributor Inchcape Plc. pic.twitter.com/XvGlPGETAc

— Ted Cordero (@Ted_Cordero) January 18, 2023

At a press conference in Taguig City on Wednesday, executives from Inchcape and CATS announced that both companies are entering into a joint venture agreement.

Inchcape is acquiring 60% of CATS, while the remaining 40% will be retained to the Ang family, which founded the local premium vehicles distributor.

CATS is the distributor for Mercedes-Benz, Chrysler, Jeep, Doge, Ram, Jaguar, and Land Rover in the Philippines. It also has dealerships for Mazda and Harley Davidson Motorcycles.

The deal is expected to be completed in the first half of 2023.

“We are very pleased to be entering the new and strategically important market of the Philippines through the acquisition of a controlling stake in CATS’ Philippine operations. As the leading luxury vehicle distributor in the market, CATS has excellent OEM (original equipment manufacturer) relationships, and we look forward to working with them and the Ang family to drive the business forward,” said Inchape Asia-Pacific chief executive officer Ruslan Kinebas.

The acquisition of controlling stake in CATS by Inchcape forms part of the British automotive distributor’s goal to expand its global footprint and presence in Asia and other under-penetrated markets.

The company is also banking on the Philippines’ automotive market as sales are forecasted to grow to 500,000 by 2026.

Francis Jonathan Ang, CATS director, said the joint venture with Inchcape is expected to add £120 million annualized revenue to the company.

Officials from both Inchcape and CATS declined to disclose the amount of the transaction.

Ang, however, said both parties are “willing to undergo” a merger and acquisitions review by the Philippine Competition Commission (PCC).

PCC has to be notified for mergers and acquisitions that reach a Size of Party of P6.1 billion and a Size of Transaction of P2.5 billion for mandatory merger review.

“After over 30 successful years of operating independently, we believe the time is now right for CATS to take the next step in our growth journey and in Inchcape we have found the right partner to drive us forward. The Philippines is a fast-growing market with an increasing demand for the luxury vehicles we provide, and we look forward to leveraging Inchcape’s leadership in digital and data to further build our distinctive market position through the provision of best in class customer service,” said CATS founder Felix Ang.—AOL, GMA Integrated News