The Yuchengco and the Ayala groups announced Monday a plan to merge their education businesses, a deal that could be finalized in the first quarter.
The Yungchengco group’s iPeople Inc. and Ayala Corp.’s AC Education Inc. executed a non-binding term sheet for their potential merger, both parties said in separate disclosures to the stock exchange.
Under the non-binding term sheet, the two parties agreed to an exclusivity period to complete due diligence and finalize the terms and conditions of the proposed merger within the first quarter.
The Yuchengco group’s iPeople will be the surviving entity.
The potential merger would bring together the educational institutions of the Yuchengco group’s House of Investments and Ayala Corp. with a combined population of over 40,000 students.
The potential merger would include iPeople and subsidiary Malayan Education System Inc. which operates Mapua University, Malayan Colleges Laguna and Malayan Colleges Mindanao.
Mapua is a leading private engineering and technical university in the country, a world ranked QS-3 star university and the school with the most centers of excellence in engineering in the list of the Commission on Higher Education.
Ayala Corp.’s AC Education Inc. will put in University of Nueva Caceres, one of the oldest and largest universities in Bicol and Apec Schools, the largest stand-alone chain of private high schools in the country.
“We are looking forward to this potential merger. Mapua’s reputation as a leading private engineering and technical university in the country, together with AEI’s ability to provide quality education leading to enhanced employability, at an affordable price, would enable the Yuchengco Group of Companies and Ayala Corp. to jointly contribute to the improvement of the quality of education in the Philippines, for the benefit of all sectors of society,” said House of Investments chairperson Helen Dee.
Ayala Corp. chairman and chief executive Jaime Augusto Zobel de Ayala said the potential combination of iPeople and AEI “would create significant synergies that would enable us to better equip students for compelling futures.”
All terms and conditions of the proposed merger, including the involvement of House of Investments and Ayala Corp. in the management of the surviving entity, iPeople, will be presented for approval by the parties’ respective boards of directors and merging parties’ stockholders.
The transaction is also subject to regulatory approvals.