THE Ayala and Yuchengcho groups will finalize the merger of their education units this May, after securing the final clearance from the Securities and Exchange Commission (SEC) yesterday.

In a disclosure to the stock exchange Thursday, Ayala Corp. (AC) said the SEC has approved the plan and articles of merger between its unit AC Education, Inc. and listed Yuchengco-led firm iPeople, Inc. (IPO) on April 24.

AC said the merger will take effect on May 2.

IPO will be the surviving entity after the merger, and will then be valued at P15.5 billion. Its parent, House of Investments, Inc. (HI), will have a 51.3% stake in the firm while AC will own 33.5%.

Given the SEC’s approval, IPO and AC Education will conduct a share-swap transaction worth P5.19 billion. This involves IPO’s issuance of 295.33 million common shares out of its authorized and unissued capital stock in exchange for 1.99 billion AC Education shares.

AC will subscribe to 132.79 million AC Education shares, after which it will acquire an additional 54.5 million shares from exiting affiliates of HI.

“The merger involves an exchange of shares between iPeople and AC Education, which translates to an exchange ratio of 6.75 shares of AC Education for every one share of IPO,” according to IPO’s disclosure.

The transaction will place the seven educational institutions throughout the full education cycle held by AC Education and IPO under one roof. The combined student population following the merger is seen to reach almost 60,000.

Institutions under IPO include Mapua University, operated by its subsidiary Malayan Education System, Inc. Mapua is recognized as a leading engineering and technical university in the country with the most number of Centers of Excellence in Engineering awarded by the Commission on Higher Education.

IPO also operates Malayan Colleges in Laguna and Mindanao, as well as Malayan Science High School in Manila.

Meanwhile, AC Education brings to the table APEC Schools, the largest chain of private stand-alone high schools in the country. It has 23 sites located in Metro Manila, Cavite, Rizal, and Batangas with about 16,000 students.

AC Education also operates the University of Nueva Caceres — among the largest and oldest universities in Bicol, and the National Teachers College, a private tertiary school that specializes in teachers’ training.

HI and AC approved the merger of their educational arms back in October 2018. The transaction was also given clearance by the Philippine Competition Commission.

Shares in IPO were unchanged at P11.02 apiece, while shares in AC were up 0.11% or a peso to P885 each at the stock exchange on Thursday. — Arra B. Francia