The Philippine Competition Commission approved the proposed acquisition of shares in beverage and snack maker Pepsi-Cola Products Philippines Inc. by Korean beverage firm Lotte Chilsung Beverage Co. Ltd.
The PCC said the deal would not likely result in a substantial reduction of competition in the sector.
The PCC based the finding on the assessment of the Mergers and Acquisitions Office that sufficient competitive constraints remain in the market for the supply of carbonated soft drinks, non-carbonated beverage,and bottled water in the country.
The government’s anti-trust body said the share acquisition would not likely give the parties an increased advantage in the supply of Polyethylene Terephthalate in the world market and in the distribution of non-alcoholic beverages in the national market.
Lotte Chilsung in January announced it was acquiring up to 2.134 billion common shares of PCPPI through a tender offer at a price of P1.95 per share.
The shares represent 57.78 percent of PCPPI’s total issued and outstanding capital stock.
Lotte Chilsung held an approximately 38.8-percent stake in PCPPI while the US beverage giant PepsiCo Inc. owned a 25-percent interest in the Philippine company.
Lotte Chilsung said the tender offer was as an opportunity for shareholders to sell their shares and potentially realize their investment. It conducted the tender offer as a strategic initiative to enable it to acquire a significant economic interest in PCPPI.
The Securities and Exchange Commission in February ordered Lotte Chilsung to stop the tender offer due to a questionable fairness opinion report.
Lotte Chilsung, one of the biggest beverage companies in South Korea, in 2010 acquired a significant stake in PCPPI after purchasing the combined holdings of Guoco Inc., Hongway and other minority shareholders.
Share price of PCPPI on Monday surged 33.1 percent to P1.73.
The PCC to date has received applications on 211 mergers and acquisitions for review. The agency approved 194 of these local and global transactions, with a combined value of P3.81 trillion.
