The Mergers and Acquisitions Office of the Philippine Competition Commission opened the second phase of its review into the proposed acquisition by International Container Terminal Services Inc. of more shares in Manila North Harbour Port Inc.
The transaction involves ICTSI’s proposed acquisition of shares in Harbour Centre Port Terminal Inc. which will bring its current shareholding to 50 percent.
Post-transaction, ICTSI will own and control 50 percent of the shareholdings in Manila North Harbour, with the remaining shares held by San Miguel Holdings Corp. at 43.33 percent, IZ Investment Holdings Inc. at 6.5 percent and Petron Corp. at 0.17 percent.
ICTSI is a port management company dealing with international shipments and operating in various countries, while MNHPI operates the Manila North Harbour which serves domestic cargoes in the Port of Manila.
ICTSI operates in Laguna, Olongapo, Batangas, Davao, Cagayan de Oro, and South Cotabato. It also owns and operates the Manila International Container Terminal which serves international cargo from the Port of Manila.
MNHPI is a subsidiary of SMHC, a company owned by San Miguel. The ultimate parent entity of San Miguel is Top Frontier Investment Holdings Inc.
The initial market investigation conducted by MAO indicates that the transaction may affect the port industry, especially the markets for the provision of port operation and transshipment services in the Port of Manila. Othel V. Campos
MAO has 60 days from Nov. 15, 2018 to carry out phase 2 of the review.
PCC said the start of the second phase did not mean that MAO made a definitive finding of substantial lessening of competition or prejudged the review.
It said that a more detailed analysis of the transaction was required using additional information from ICTSI, Manila North Harbour and third parties to determine whether the transaction would likely to lead a substantial lessening of competition in the market for port operation and transshipment services.
The merger review office seeks to investigate whether the transaction enhances the ability and incentive of the involved firms to engage in foreclosure of competitors where vertical relationships between the ICTSI and Manila North Harbour operations are present, including transshipments of goods.