Mitsubishi Corp. is increasing its economic stake in Ayala Corp. (AC) to 15 percent through a P44.5-billion investment, giving the conglomerate fresh capital to reduce debt, buy back shares, and fund new growth opportunities.

AC said Monday the transaction, valued at about $700 million, involves primary and secondary shares, including a voluntary tender offer, at P650 per common share.

Upon completion, Mitsubishi’s economic ownership in AC will rise from 4.7 percent to 15 percent. In comparison, its voting stake will increase to 20 percent, making the Japanese trading house one of AC’s largest long-term strategic shareholders.

AC expects to receive about P20 billion in proceeds from the transaction. 

The company said the funds will be used to strengthen its balance sheet through debt reduction, continue its share purchase program covering AC and its listed subsidiaries, and support future growth initiatives.

“This transaction represents much more than a capital investment,” AC Chairman Jaime Augusto Zobel de Ayala said.

“It reflects the strength of a relationship built over many years and a deep alignment in values, long-term thinking, and responsible business stewardship. As we enter this new chapter with Mitsubishi, we look forward to deepening our collaboration and creating lasting value for our stakeholders while contributing meaningfully to the country’s continued progress.”

As part of the transaction, AC intends to conduct on Mitsubishi’s behalf a voluntary tender offer for up to about 30 million common shares at P650 apiece, subject to regulatory requirements.

The tender offer will allow public shareholders to sell their shares at the same price agreed with Mitsubishi. AC said additional details will be disclosed later.

The two groups also plan to expand their collaboration in infrastructure, energy transition, real estate, digital technologies, mobility, logistics and other emerging growth industries.

“Mitsubishi’s increased investment in AC is designed to grow value for Ayala’s shareholders by combining global reach and technology of one of Japan’s leading trading houses with the assets of one of the Philippines’ most diversified conglomerates. 

This is about turbo-charging a 52-year relationship to benefit our various stakeholders,” AC President and CEO Cezar P. Consing said.

Subject to shareholder and regulatory approval of proposed amendments to AC’s Articles of Incorporation, the company’s board will also be expanded to nine members from seven.

AC and Mitsubishi have worked together for 52 years across several sectors and business ventures. 

The companies said the expanded partnership is also expected to support technology and knowledge transfer and open new opportunities across AC’s portfolio.

The transaction remains subject to closing conditions and applicable regulatory approvals.