Manila Water Company, Inc. (stock: MWC) has officially sold its majority stakes in two Bulacan-based water companies—Bulakan Water Company, Inc. (BWCI) and Obando Water Company, Inc. (OWCI)—to SMC Bulacan Water Services Corp., a subsidiary of San Miguel Corporation (stock: SMC), led by Ramon S. Ang. This P1.02-billion transaction marks a significant shift in the landscape of water services in the province and is a strategic financial move for both parties involved.
On May 16, 2024, Filipinas Water Holdings Corp. (FWHC), a wholly owned subsidiary of Manila Water, signed a Share Purchase Agreement (SPA) with SMC Bulacan Water Services for the sale of its 90% stakes in BWCI and OWCI. This divestment involved the sale of 135 million BWCI shares at Php4.487 per share and 88.2 million OWCI shares at Php4.749 per share, bringing the total purchase price to Php1,024,573,343. The sale officially closed in October 22, 2024 after fulfilling all closing conditions, including regulatory approvals and amendments to joint venture agreements with the local water districts of Bulakan and Obando.
The divestment allows Manila Water to monetize assets and direct the proceeds to fund other strategic initiatives of the company and its subsidiary, Manila Water Philippine Ventures, Inc. This is a key component of Manila Water’s long-term growth strategy, which involves focusing on projects beyond its traditional concession areas, such as the East Zone of Metro Manila and parts of Rizal Province.
The sale also aligns with Manila Water’s intent to focus on expanding its business units outside the East Zone, as well as other ventures in Thailand, Vietnam, Saudi Arabia, Indonesia, and Myanmar. These investments reflect the company’s broader goal of maintaining its leadership in the water utility sector while growing its international footprint.
About BWCI and OWCI
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Bulakan Water Company, Inc. (BWCI) is a joint venture between FWHC and the Bulakan Water District. It operates the water and sanitation concession in the municipality of Bulakan, located in Bulacan province.
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Obando Water Company, Inc. (OWCI) is another joint venture with the Obando Water District, providing water services in the Municipality of Obando.
With these sales, SMC Bulacan Water Services Corp. now holds majority control in both companies, strengthening SMC’s water-related investments in Bulacan. This acquisition is part of SMC’s broader initiative to provide reliable, affordable, and sustainable water services in the region. Notably, SMC has been working through its subsidiary, Luzon Clean Water Development Corp. (LCWDC), to deliver potable water to over 350,000 households in Bulacan through the Bulacan Bulk Water Supply Project.
For Manila Water, this transaction serves as a strategic repositioning. The P1.02-billion in proceeds will allow the company to pursue new ventures and fund expansion efforts outside of its East Zone concession, which currently covers key areas like Makati, Pasig, Taguig, and Rizal Province. The sale is consistent with the company's business model of optimizing its asset base, particularly in the domestic and international water markets.
On the other hand, SMC’s acquisition cements its foothold in Bulacan’s water services sector, where it already operates the Stage 3A of the Bulacan Bulk Water Supply Project. Scheduled for completion in 2025, this project is set to enhance water availability across 24 municipalities in the province, addressing long-standing supply issues while fostering economic growth in the area.
The water utility sector in the Philippines is poised for increased consolidation and expansion, with major players like Manila Water and SMC leading the charge. These companies are positioning themselves to meet the growing demand for water services, driven by urbanization, population growth, and the need for improved infrastructure.
For investors, this transaction highlights Manila Water’s continued focus on long-term profitability and expansion opportunities, both domestically and internationally. Meanwhile, SMC’s growing presence in the water sector reflects its commitment to diversification and providing essential services to underserved regions.