The Philippine Competition Commission said Monday it approved the acquisition by Udenna Corp. of the entire outstanding capital stock of KGL Investment B.V., which owns indirect stake in 2Go Group Inc.
KGLI-BV is a private limited liability company under KGL Investment Coöperatief UA and is incorporated and existing under the laws of the Netherlands, while Udenna is a holding company led by Davao City-based businessman Dennis Uy.
PCC said in a statement the transaction would not result in substantial lessening of competition within the Philippine market because there were no existing horizontal overlaps or vertical relationships that existed between the parties.
PCC said the parties also complied with the requirements after the agency earlier voided the transaction and imposed a P19.6-million fine on the parties for consummating the deal without clearance from the antitrust body.
Under the Philippine Competition Act, PCC is mandated to review mergers and acquisitions to ensure that these deals will not prejudice the interest of the consumers.
Under PCC Case No. M-2017-001 promulgated on Feb. 15, the parties were found to have violated Section 17 of the Republic Act No. 10667 and Rule 4, Section 3(b)(4) of its implementing rules and regulations.
The Mergers and Acquisitions Office of PCC found that Udenna bought the entire shareholdings of KGLI-BV as signed by the two parties through a share purchase agreement dated July 28, 2016. The deal was consummated as reflected in a deed of transfer dated Aug. 19, 2016.
The parties then filed their notification on March 23 and entered phase 1 review on April 5, 2018.
The firms also paid the fine in 2018 at the National Treasury as part of the compliance order.
Udenna, a holding company and parent entity, is engaged in diverse business interests including distribution and retail of refined petroleum products and lubricants, tankering and inter-island transport of petroleum products and other bulk products, ship management, operation of oil depots and storage facilities, operation of an industrial park, real estate or property development, and waste management and environmental services through its subsidiaries.
KGLI-BV is a holding company maintaining a single investment portfolio in the Philippines, which is the minority interest in KGLI-NM Holdings Inc.
KGLI-NM’s subsidiary is Negros Navigation Co. Inc. or Nenaco which in turns owns 2Go Group Inc. Nenaco and 2Go are domestic corporations with businesses in shipping and logistics. KGLI-BV has a minor effective ownership in Nenaco and 2Go.
Documents showed that once the transaction was consummated, Udenna would own 100 percent of KGLI-BV.