Antitrust body clears City & Land, CDC merger

City & Land Developers Inc. has moved a step closer toward its exit from the Philippine Stock Exchange (PSE) via a merger with its parent firm, Cityland Development Corp. (CDC). This, after securing clearance from the Philippine Competition Commission (PCC).

In a regulatory filing on Wednesday, CDC said the PCC had classified its merger with City & Land an “internal restructuring.” This means it was not anticompetitive.

CDC and City & Land now only need the clearance of the Securities and Exchange Commission before proceeding with their union.

The companies, both involved in real estate development, first announced the deal in August. This was after City & Land’s board of directors approved the merger via share swap with CDC.

“By consolidating the businesses under CDC as the surviving entity, the merger will allow for a simplified ownership structure, better operational coordination, enhanced business focus and reduced overall corporate costs,” CDC said in its disclosure.

CDC will issue 1.4 billion primary common shares to City & Land stockholders as consideration for the merger, based on the determined swap ratio. Every one of City & Land share is equivalent to 0.88 CDC shares.

The companies clarified they had engaged an independent third-party adviser to determine the fairness of the swap ratio. This was finalized after a “detailed study.”

CDC, which owns 49.73 percent of City & Land, will likewise absorb all of the latter’s assets, liabilities, rights and privileges.

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As the surviving entity, CDC will have to assume all the existing debt of City & Land to ensure continuity and “full protection for creditors and stakeholders.”

Once the merger is completed, City & Land will cease to exist as a separate legal entity. Its shares will be delisted from the PSE.

City & Land currently acquires and develops land for residential, office, commercial, institutional and industrial projects.

Apart from City & Land, CDC’s other subsidiary is Cityplans Inc., in which it holds a 90.81-percent stake.