The Philippine Competition Commission approved the acquisition by Ayala Healthcare Holdings Inc. of shares in Negros Grace Pharmacy Inc., saying the move will not obstruct fair competition in the healthcare space.
The Ayala Group’s generics line proposed to buy into a regional full-range drugstore chain within the sphere of the local pharmaceutical retail market.
The transaction involves the acquisition of shares by AHHI of 75 percent of the outstanding capital stock of Negros Grace from Jasminum Corp. The remaining shares will remain with JC.
After the transaction, the resulting capital structure of Negros Grace will have an authorized capital stock of P100 million divided into 100 million shares with a par value of P1 per share.
AHHI, the corporate entity that includes AC Health, owns generic pharmacy line Generika Drugstore, community-based clinic brand Family Doc, online pharmacy and delivery platform MedGrocer, medical records app Vigos and doctor-patient booking app Aide.
Negros Grace and its subsidiaries, Solomon Drug Corp. and Samuel Drug Corp., are pharmaceutical firms with strong regional presence in Central and Western Visayas with a total of 70 drugstores. Negros Grace drugstores sell mostly branded drugs and a few generic drugs.
The PCC review looked into how the transaction would affect consumers in the retail sale of pharmaceutical products in the islands of Negros and Panay.
The PCC said in a decision on May 23 that the merger review found that the transaction would not likely lead to a substantial lessening of competition in the relevant market as the merged firms did not have an incentive or the ability to increase prices or reduce product assortment. Othel V. Campos
The commission said that post-transaction, a sufficient number of retail players would remain in the drugstore chain market in both the regional and national scope.
It is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not harm the interest of consumers. It has received 184 merger transactions by local and international companies, approved 171 of them and blocked 1 anti-competitive merger.
These transactions reached P2.86 trillion in terms of the transaction value.