Petron acquiring Liquigaz LPG unit
Small players in the liquefied petroleum gas sector expressed concern over the planned buyout of the LPG operations of Liquigaz, a wholly-owned subsidiary of SHV Energy of the Netherlands, by Petron Corp.
Rep. Arnel Ty of the LPG Marketers’ Association said once Petron concluded the negotiations with Liquigaz for the sale, it would corner 70 percent of the LPG industry and become a monopoly.
LPGMA’S members include Omni Gas, Pinnacle Gas, Island Gas, Cat Gas and Nation Gas.
“The problem...why we brought this up [with Energy Secretary Carlos Jericho Petilla] is because we have no Anti-Trust Law. If Petron is able to buy Liquigaz, because it is offering an amount that Liquigaz cannot refuse, they will have a 70-percent market share in the Philippines, and that’s cartel already,” Ty said.
Ty said Petron gave a non-binding offer of $60 million (around P2.6 billion) for Liquigaz’s LPG business, which the other bidders are forced to match.
“They [Petron] doubled the book value while the company is not earning much. The government should look at the picture of what Petron wants to happen,” he said.
Ty said the Energy Department should look into Petron’s acquisition strategy, which was meant to ease out competition.
Ty said after Petron acquired Chevron’s LPG business in 2007, Petron was able to get a 43-percent market share.
Liquigaz captured about 31 percent of the country’s total LPG demand since it was established in 1995, according to its Web site.
‘We’re seeing that Petron may buy Solane [formerly Shellane] next,” he said.
Isla LPG Corp., the joint venture between Itochu of Japan and the Citadel Holdings Inc. of the Delgado Group, acquired Pilipinas Shell’s LPG business in the Philippines for around $131 million.
Ty said he expected Petron to offer Liquigaz in the next few months as much as P3 billion for its Philippine operations to further ease out the other interested players.
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