The Philippine Competition Commission said Monday it approved the acquisition by SMC Global Power Holdings Inc. of the power assets of American company AES Corp. in the Philippines.
PCC said its mergers and acquisitions office found that the transaction, involving SMC Global’s acquisition of Masin-AES Pte. Ltd., AES Transpower Pte. Ltd. and AES Philippines Inc., would not result in substantial lessening of competition in the power generation and retail electricity markets.
“There remains sufficient competitive restraints from competitors in the relevant markets after the acquisition,” the agency said in a decision.
“The transaction is not likely to substantially increase the likelihood that the parties will engage in a coordinated behavior,” it said.
AES owns a 51-percent equity interest in the 630-megawatt Masinloc coal-fired power plant in operation, the 335-MW Masinloc 2 coal-fired power plant under construction and the 10-MW Masinloc energy storage project in operation.
San Miguel announced in December 2017 a plan to acquire AES’ 51-percent equity interest in Masinloc projects and the 49-percent stake held by Thailand’s Electricity Generating Public Company for $1.9 billion.
The antitrust body said its review found “neither increased ability nor incentive to engage in anti-competitive foreclosure after the transaction.”
The proposed transaction involves the acquisition of SMC Global Power Holdings Corp., the power arm of San Miguel, of 51-percent and 49-percent equity interests of AES Phil Investment Pte. Ltd. and Gen Plus B.V. respectively in Masin-AES Pte. Ltd. and 100-percent equity interest of AES Corp. in AES Transpower Pte. Ltd. and 100-percen of equity interest of AES Phil in AES Philippines Inc.
It said that as a result of the transaction, SMC Global would become the 100-percent owner of each of Masin-AES Pte. Ltd., AES Transpower Private Ltd. and AES Philippines Inc.
SMC Global’s portfolio currently includes Sual Power Plant in Sual, Pangasinan; San Roque Hydroelectric Multipurpose Power Project in San Manuel, Pangasinan; Ilijan Power Plant in Ilijan, Batangas; Limay Greenfield Clean Coal Plant in Limay, Bataan; Angat Hydroelectric Power Plant in Angat, Bulacan; and Greenfield Powerplants in Malita, Davao del Sur and Limay, Bataan.
AES owns Masinloc coal-fired thermal plant and Masinloc Battery in Zambales and Kabankalan Battery Storage System in Kabankalan, Negros Occidental.
SMC Global said the acquisition was expected to improve its baseload capacity to provide affordable and reliable supply of power to customers, while AES Corp. aims to re-shape its global portfolio of businesses and markets to be consistent with its new strategy.
Gen Plus B.V. aims to focus on its existing power plant mix in Luzon and pursue new development and investment opportunities for thermal and renewable power plants in the Philippines.
PCC is mandated under the Philippine Competition Act to review mergers and acquisitions that meet the P1-billion threshold to ensure that these deals do not harm the interest of consumers.
