MANILA - The education units of the Yuchengco and Ayala groups said Monday they were discussing a potential merger, which could be finalized as early as the first quarter.

Ayala Corp's AC Education Inc and the Yuchengco Group of Companies' iPeople agreed to an "exclusivity period to complete due diligence, and to finalize the terms and conditions of the proposed merger within the first quarter of 2018," the companies said in a joint statement.

The surviving entity will be iPeople, currently the listed holding company for education of the Yuchengcos' House of Investments Inc., according to the statement.

Institutions under House of Investments include Malayan Education System Inc, which operates Mapua University. AC Education, on the other hand, operates University of Nueva Caceres and APEC Schools.

The merger would result in a combined student population of over 40,000.

"Mapua's reputation as a leading private engineering and technical university in the country, together with AEI's ability to provide quality education leading to enhanced employability, at an affordable price, would enable the Yuchengco Group of Companies and Ayala Corporation to jointly contribute to the improvement of the quality of education in the Philippines, for the benefit of all sectors of society," said House of Investments chairperson Helen Yuchengco-Dee.

Ayala Corp chairperson Jaime Augusto Zobel de Ayala said the merger would "create significant synergies that would enable us to better equip students for compelling futures."