The Philippine Competition Commission (PCC) said Friday it approved the acquisition by Metro Pacific Agro Ventures Inc. of all outstanding shares in Franklin Baker Company of the Philippines after a review found the deal would not stifle market competition.
Metro Pacific Agro Ventures, a wholly owned subsidiary of Metro Pacific Investments Corp., is an integrated agri-food company involved in dairy, fresh produce and coconut-based products. Through its affiliate Axelum Resources Corp., the company operates a coconut production facility in Medina, Misamis Oriental.
Franklin Baker manufactures and exports value-added coconut products including desiccated coconut, coconut water, coconut cream and coconut milk. The company maintains production facilities in San Pablo, Laguna and Santa Cruz, Davao del Sur to supply a global customer base.
The PCC said its Mergers and Acquisitions Office initially elevated the transaction to a phase 2 review due to concerns over potential monopsony effects, or a market situation with only one buyer, regarding the procurement of mature raw coconuts in Mindanao.
It said, however, a detailed assessment and field missions in Northern Mindanao and the Davao Region showed that the transaction is unlikely to substantially lessen competition.
The regulator said it determined that the presence of alternative buyers, particularly copra manufacturers that command a significant share of demand, ensures farmers retain multiple selling options.
The commission said it also found that the global scale of coconut product manufacturing constrains the ability of companies to raise prices or reduce quality. The market is characterized by numerous competing suppliers and price-sensitive international buyers, it said.
The antitrust body said the approval aligns with its mandate to ensure consolidation in the agri-food sector does not undermine consumer welfare or a level playing field in domestic and global markets.
