Pasay—(PHStocks)—The Board of Directors of SM Investments Corp. (PSE: SM) approved the merger of its retail arm, SM Retail Inc. (SM Retail) with several related retail companies, including Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company, Sports Station and several other specialty stores. Together, they operate 1,374 outlets and in 2015 delivered total revenues of PhP53 billion.
The merger will complement the existing retail portfolio of SM Retail, which includes 53 SM department stores, 44 hypermarkets and 213 supermarkets as well as majority stakes in the local operations of Alfamart, Forever21, Crate & Barrel and other specialty and apparel retailers, in addition to a minority stake in Uniqlo.
The combined entity will have 1,927 outlets and 2.4 million square meters of gross floor area across a diverse portfolio of food, household appliances, DIY, furniture, apparel, footwear, pharmaceuticals/cosmetics and specialty retailing stores. The portfolio will serve a wide range of Filipino consumer needs in both staple and discretionary goods categories and will continue to leverage extensive synergies across the SM group.
Post-merger, SM will own 77.3% of the enlarged SM Retail Inc.
“The merger adds both greater diversity and a more extensive footprint to SM Retail’s portfolio and is consistent with our goal of simplifying our corporate structure. It is similar to the consolidation we undertook in 2013 to create our large-scale, mixed-use property business. As a result, SM Retail will be even better positioned to address the growing needs of Filipino consumers and we expect the merger to be accretive to SM Retail earnings in future years,” said Harley Sy, President of SM.