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Friday, March 29, 2024

San Miguel-PLDT-Globe deal covered by anti-trust regulation

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The Philippine Competition Commission will take time to decide if the recent telecommunications deal among Philippine Long Distance Telephone Co., Globe Telecom Inc. and San Miguel Corp. is anti-competitive pending the release of the implementing rules and regulations.

Commission chairman Arsenio Balisacan told reporters during the Management Association of the Philippines’ general membership meeting the body would  assess the transaction after formal notification from the concerned parties.

“The transaction is deemed approved if this is completed, [or] executed before the implementing rules and regulations becomes effective. Pending the release of the IRR and as we are yet to see the transaction, it is difficult to say anything, we have to wait for more information,” he said at the sidelines of the meeting. 

The IRR, which is undergoing revisions, is expected to be released and promulgated by the commission this month;. 

The body declined to comment on the telecommunications deal, which could be the first case after the creation of the commission.

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Parties to a merger or acquisition agreement with a value of more than P1 billion, according to a directive approved in February, should notify the commission of the details of the transaction, including the key terms and the timing of the execution or implementation of the deal.

Agreements consummated without notifying the commission may nullify the transaction and penalize the parties equivalent to 1 percent and 5 percent of the total value of the transaction.

PLDT, Globe and San Miguel as of press time has not notified the commission.

The companies have 30 days to notify the commission and have the transaction approved.

The telecommunications deal enabled PDLT and Globe to jointly acquire 100-percent equity interest in San Miguel’s Vega Telecom Inc. for P52.08 billion and the assumption of P17.02 billion of liabilities as well as other telecommunications assets.

The deal is believed to empower existing operators to improve Internet and data services to the public. San Miguel’s sale is seen to improve the mobile broadband service of acquiring companies within the next six months when both PLDT and Globe will have access to the 700 megahertz frequency.

Balisacan reiterated the competition law did not prohibit mergers and big-time acquisitions. 

“What it prohibits are anti-competitive agreements and the use of dominant position to abuse the market and consumers,” he said.

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