JOSEPH ARANETA GAMBOA l March 22, 2023 l Business Mirror
BACOLOD CITY—Financial services giant Morgan Stanley predicts that there will be increased mergers and acquisitions (M&A) activity in the next two years globally. In its “2023 M&A Outlook” published last month, the Manhattan-based multinational investment management firm attributes the acceleration of deal-making to three factors: the growth in the private equity industry; the sophistication of corporate clients; and, the overall strength of corporate earnings.
This forecast was made before the US banking crisis erupted last March 10 with the sudden collapse of Silicon Valley Bank, which has since been taken over by the Federal Deposit Insurance Corp. (FDIC). Two days later, the FDIC shut down Signature Bank and most of its assets have been acquired by New York’s Flagstar Bank. Next to implode was Switzerland’s second biggest bank, Credit Suisse, which was purchased by its bigger rival, UBS, over the weekend.
But here in the heart of Sugarlandia, the talk of the town is another M&A deal: the acquisition of homegrown Don Papa Rum by UK alcoholic beverage behemoth Diageo Plc. Founded in 2012 by Filipino entrepreneur Andrew John Garcia and British liquor executive Stephen Carroll, the company that manufactures Don Papa on the foothills of Mount Kanlaon is called the Bleeding Heart Rum Co., named after the Negros bleeding heart pigeon—a critically-endangered avian species endemic to this island at the center of the Philippine archipelago.
Don Papa Rum’s name got its inspiration from Papa Isio, a Negrense sugarcane farmer who played a key role in the Philippine Revolution against Spain in 1896. He was the last Filipino revolutionary leader to surrender to the Americans in 1907, almost nine years after the Philippines became a US colony. His face is prominently displayed on the rum’s label along with exotic and indigenous animals found in the Visayas.
The Fil-Brit M&A transaction involves an upfront payment of 260 million euros with a further potential consideration of 177.5 million euros, equivalent to a combined total of P25.6 billion at the current peso-euro exchange rate. This makes Diageo-Don Papa deal one of the highest in Philippine business history.
Diageo itself was the result of a 1997 merger between Ireland’s Guinness Brewery and England’s Grand Metropolitan conglomerate. It is listed in both the London and New York stock exchanges. Major brands that Diageo acquired over the past 25 years include Johnnie Walker whiskey, Smirnoff vodka, Gilbey’s gin and Baileys liqueur.
Passion and integrity
CENTRALE Bacolod is a new master-planned community in the so-called “City of Smiles.” It is centrally-located near the commercial and shopping districts as well as educational and healthcare institutions. The 50-hectare prime development is a project of the Active Group of Companies, whose founder Tony Turalba recently launched his coffee-table book eponymously titled “Antonio A. Turalba: Passion & Integrity.”
Written and edited by Palanca Hall of Fame awardee Alfred Yuson, this 208-page volume is about Turalba’s journey as a self-made man who started out as an architect and turned into a successful property developer. At some point, he even became a banker after acquiring Maunlad Savings & Loans Association and renaming it to Active Bank.
An appropriate venue for the book launch was the Mount Malarayat Golf & Country Club, his majestic masterpiece in Batangas. According to Yuson, it was Turalba’s greatest challenge: converting 200 hectares of farm land in Lipa into a 27-hole golf course and residential estate despite the economic crisis that he had to weather for five years. And to think that he embarked on this P3-billion venture when he was barely in his 50s.
Among the signature realty projects in the Active Group’s portfolio are: the ACT Tower in Salcedo Village, Makati City; Porto Laiya in San Juan, Batangas: the Town & Country estates in Metro Manila, Calabarzon and here in Talisay City, Negros Occidental; and, The Arcadia enclave in Corinthian Gardens, Quezon City.
Last month, Turalba donated a dramatic sculpture of iconic artist Eduardo Castrillo to the University of the Philippines as a gift to his alma mater, the UP College of Architecture. That garden corner of Melchor Hall in Diliman has officially been named the Turalba Plaza, located at one end of the Tau Alpha fraternity’s Legacy Boardwalk that stretches up to Palma Hall. What a fitting tribute to a Tau Alphan turned philanthropist who built his empire from scratch.
*** Joseph Gamboa is the vice-chairman of the Ethics Committee of the Financial Executives Institute of the Philippines and director of Noble Asia Industrial Corp. The views expressed herein do not necessarily reflect the opinion of these institutions and the Business Mirror.