Ayala seals agreement with Mitsubishi for ₱18.4 billion investment in GCash, Fuse

The Zobel family’s Ayala Corporation and subsidiary AC Ventures Holdings Corporation (ACV) has signed the Investment Agreement for Mitsubishi Corporation’s acquisition of a 6.5 percent stake in GCash owner Globe Fintech Innovations, Inc. (Mynt) for ₱18.4 billion.

In a disclosure to the Philippine Stock Exchange, Ayala said the agreement covers Mitsubishi’s subscription to 18.03 million common and redeemable preferred shares of ACV.

ACV shall use the subscription proceeds to redeem AC’s redeemable preferred shares in ACV and cover related costs. After the transactions, AC and MC shall each own a 50 percent ownership stake in ACV. 

However, Mitsubishi’s investment will only be completed after satisfaction of conditions precedent (including the approval by the Securities and Exchange Commission of the amendment of the articles of incorporation of ACV and the approval or deemed approval of the Philippine Competition Commission).

ACV owns about 13 percent of Mynt which has two fintech companies: G-Xchange Inc., the mobile wallet operator of GCash, and Fuse Lending, a tech-based micro-lender. 

Prior to the signing of the Investment agreement between Ayal, ACV and Mitsubihi, the parties had executed the binding term sheet last October 18.
“Mitsubishi, Japan’s largest trading company, can help Mynt grow overseas and within its own significant Japan-based ecosystem, and in areas like cloud-based payments and new credit algorithms,” Ayala said.

Ayala and Mitsubishi entered into a partnership and cooperation agreement in 1974 that has since featured industrial estates, renewable energy projects, a water utility, and auto dealerships.

“The two companies are refreshing their partnership with the objective of supporting and capitalizing on the Philippines’ economic growth, which this year ranks among the fastest in the region,” the Zobel-led conglomerate said.

Ayala President and CEO Cezar P. Consing said “We believe Mitsubishi can add meaningful value to Mynt, which will allow Mynt to deliver significant value to its over 94 million registered users.”

“It’s all about serving better the many Filipinos that depend on GCash and Fuse, and for making a wider variety of financial and other products available to as many Filipinos as possible,” he added.

Ayala said the needed corporate approvals had been completed for its acceptance of a binding offer from Mitsubishi to invest in ACV which will serve as the joint venture entity that will explore consumer-related and digital opportunities in the Philippines.

Ayala had recently invested P22.4 billion for the acquisition of an additional eight percent of Mynt from its unnamed shareholders. The additional Mynt shares were bought through ACV to increase its stake in Mynt to 13 percent.

Ayala said earlier that Mitsubishi UFJ Financial Group (MUFG), Japan’s largest banking group and one of the largest financial institutions globally, was acquiring an eight percent stake in Mynt through its consolidated subsidiary MUFG Bank, Ltd.

“We are thrilled to welcome MUFG as a new strategic partner. With their global expertise and reach within the financial inclusion space, they will be instrumental in further expanding GCash’s social impact, especially to the underserved,” said Mynt President and CEO Martha Sazon.

She added that, “Alongside this, Ayala’s unmatched commitment to Philippine economic growth and development, and its expertise in multiple industries will accelerate GCash’s mission.”

“GCash is an indispensable infrastructure for everyday life of Filipinos and we are delighted to join Mynt as a strategic investor to support the growth of the company.” said Yasushi Itagaki, Senior Managing Corporate Executive, Head of Global Commercial Banking Business Group at MUFG.

He noted that, “With our investment, we are excited to expand our contribution to the ongoing development of the Philippines’ digital economy and financial inclusion.”