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Metro Pacific to divest Air21 stake to Ayala; could still invest in logistics to support agribusiness — execs

Metro Pacific Investments [PSE:MPI], the Philippines-based infrastructure conglomerate, is set to exit logistics company Air21 Group by selling its shareholdings to AC Logistics, a subsidiary of local conglomerate Ayala Corp [PSE:AC], Chairman Manuel Pangilinan said. 

“We don’t want to be spoilers,” Pangilinan said on the sidelines of the National PR Congress on 2 September, commenting on rival Ayala Corp being able to bag the majority stake in Air21, which Metro Pacific had pursued several years ago.  

This news service has been reporting since 2017 about Metro Pacific’s protracted negotiations with Alberto Lina, who founded and owned Air21, to acquire a majority stake in the company. Eventually, Metro Pacific was able to acquire only a 12% stake in Air21. Four years since Air21 began investment talks with Metro Pacific and other suitors, Ayala Corp announced in November 2021 that it is acquiring the logistics company’s majority stake for PHP 6bn (USD 105m). 

Two years into the COVID-19 pandemic, Metro Pacific decided to recalibrate its priorities in the logistics sector and stopped investing in the capital-intensive warehouse business in December 2021, as disclosed in its annual report. Alongside this is the discontinuance of its trucking- and freight-forwarding businesses. 

The conglomerate said that operating these businesses at the current economic and industry-specific conditions is “no longer viable,” as disclosed.

M&A

According to Chief Financial Officer Chaye Cabal-Revilla, the conglomerate will continue to pursue its logistics business, but will focus more on supporting its emerging agriculture business. There is more opportunity for Metro Pacific to create value in food and agriculture compared to warehousing.

Metro Pacific may consider potential M&A opportunities in the logistics space depending on the footprint of the potential target, Cabal-Revilla said without elaborating. 

In June, the conglomerate entered the agriculture business with the acquisition of a 51% stake in the maker of Carmen’s Best Ice Cream, a local brand of artisanal premium ice cream, for PHP 198m (USD 3.6m). The investment will be used to further develop and expand the operations of its dairy farm and dairy products manufacturing facilities.  

Metro Pacific is looking to invest in all segments of the agricultural value chain in its quest to build a local version of Indofood Sukses Makmur [IDX:INDF], its Indonesian food solutions sister company, specifically looking at investing in coconut, corn, rice and vegetables, as reported.