The Philippine Competition Commission approved Fernwood Holdings Inc.’s acquisition of Liquigaz Philippines Corp., the liquified petroleum gas business of billionaire Lucio Co.
PCC said in a decision dated Jan. 17 the deal would not likely result in the substantial lessening of competition for the bulk and cylinder supply of LPG in Luzon.
PCC said after the acquisition, there would still be further competition constraints on the parties from other market participants in the LPG industry.
“The commission thereby resolves that it will take no further action with respect to the proposed transaction,” PCC said.
Cosco Capital Inc., the listed retail holding company Lucio Co., announced in October 2018 that it was exiting the LPG business with the sale of its entire stake in Liquigaz Philippines to Fernwood Holdings.
Cosco Capital said the transaction “is expected to maximize shareholders’ value and for the company to achieve financial flexibility moving forward.”
Cosco Capital acquired 90 percent of the capital stock of Liquigaz Philippines, a wholly-owned subsidiary of SHV Energy of the Netherlands, in 2014.
Liquigaz Philippines is the second largest supplier of LPG in the country accounting for about 30 percent of total market volume and is the biggest seller in Luzon.
More than 60 percent of the country’s annual LPG importation is unloaded, stored and sold from Liquigaz’s 12,500-metric-ton capacity storage tanks in Mariveles, Bataan, the largest of such facility in the Philippines. It is the only supplier capable of receiving both refrigerated and pressurized LPG cargo.
Liquigaz Philippines generated a 28-percent increase in revenues to P7.59 billion in the first six months of 2018, driven by an increase in sales volume and the recovery in global LPG prices during the period.
Net income, however, declined 9 percent to P233 million.
With the divestment, Cosco Capital will still have several businesses under its portfolio including Puregold Price Club Inc., S&R Membership Shopping, Ellimac Prime Holdings Inc. and Office Warehouse Inc.