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PCC reports P2.6 trillion worth of mergers, acquisitions

The Philippine Competition Commission said it received 168 applications for merger and acquisition transactions worth P2.6 trillion.

“We had approved 159 of these transactions. The status of the nine other transactions is as follows: 3 are under the sufficiency determination stage, 2 are under phase 1 review, 2 are under the more in-depth phase 2 review, 1 is pending with the courts, and 1 has not been refiled,” the commission said in a nine-page year-end report.

PCC said that in 2018, it received 40 M&A transactions, with a combined value of P438 billion, of which 33 were approved. The sectors with the most transactions are real estate with nine, manufacturing with eight, electricity and gas with five and transportation and storage with four.

The commission said it exercised its power to review voluntary commitments or impose remedies on transactions it deemed problematic from a competition point of view.

PCC said it subjected Grab’s acquisition of Uber to pricing and quality standards after opening a motu proprio merger review. 

These conditions were part of Grab’s voluntary commitments to address the competition concerns the agency raised in view of the merger of the country’s two biggest ride-hailing apps. 

The commission issued a commitment decision that bound Grab to undertakings meant to ensure that its quality of service and pricing would not be unreasonably different before and after it acquired Uber. 

PCC said it issued a statement of concerns on the Udenna-KGLI-NM Holdings transaction, following a more in-depth phase 2 review. 

The commission found a substantial lessening of competition in the market for passenger and cargo shipping services due to the transaction. This led to a review of the voluntary commitments proposed by the parties to correct potential harm to the market.

PCC said it was still reviewing Universal Robina Corp.’s acquisition of Central Azucarera Don Pedro. 

“We are studying the parties’ voluntary commitments to address potential loss of competition in the market for sugarcane milling services,” it said.

PCC said that in 2018, it bared its teeth and imposed stiff fines and penalties on entities found to violate merger rules. 

It exacted fines totaling P47.74 million for various cases involving violations of the compulsory notification requirement and non-compliance with interim measures.

“It is our hope that the imposition of these fines and penalties sends a strong message to deter future violations and encourage compliance among businesses,” the commission said.

PCC said it also changed its merger control regime.   It adjusted the merger notification thresholds from P1 billion to P5 billion, and the value of size of transaction threshold from P1 billion to P2 billion, to better filter notified transactions.

Beginning March 2019, the said thresholds will be adjusted based on the nominal GDP growth of the previous year.

“We also issued several guidelines to simplify and further streamline our merger review process for notification of joint ventures, clarificatory note on consolidation of ownership and guidelines on requests for non-coverage from compulsory notification,” the commission said.

Topics: Philippine Competition Commission , merger and acquisition transactions , Grab , Udenna-KGLI-NM Holdings
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