Redco Transit Development Pte. Ltd. of Singapore withdrew its proposal to acquire shares in Makati City Subway Inc. from Philippine Infradev Holdings Inc. and Hong Kong Binjiang Industrial Limited, the Philippine Competition Commission said Thursday.
The PCC said in a statement the concerned parties agreed to terminate the proposed acquisition on March 9, 2021.
The PCC’s Mergers and Acquisitions Office said the parties withdrew their notification of the transaction which was undergoing merger review. It said the parties informed MAO that they decided not to pursue the transaction and to terminate the share purchase agreement over circumstances relating to COVID-19 pandemic.
It said businesses have full discretion to decide on their strategies and operations as they see fit, within the bounds of the law. MAO said it carries out its functions in a non-discriminatory manner in accordance with the statutory timelines and regulatory requirements in merger reviews, and this transaction was no exemption.
The office said it accommodated the parties throughout the notification process, including the conduct of multiple consultations and the grant of their several requests for extensions equivalent to 127 days, since they filed their notification with the PCC in September 2020.
“As the country’s antitrust authority, the PCC is mandated to review mergers and acquisitions to ensure that they do not pose competition or monopoly concerns in the market. The MAO respects the parties’ decision to withdraw, modify, or re-file their agreements, and stands ready for future notifications on this transaction,” the PCC said.
Philippine Infradev, the local proponent of the $3.7-billion Makati City Subway Project, earlier reported that Makati City Subway Inc. agreed to the mutual termination of MSCI’s share purchase agreement with Hong Kong Binjiang Industrial Limited.
“It has been almost 1 year since the transactions contemplated in the agreement were submitted to the Philippine Competition Commission for approval, and to date, the same are still pending review,” the company said.
“The effectivity of the transactions contemplated in the agreement, specifically the release of funds earmarked by HK Binjiang, were conditioned on the PCC’s approval of the transactions,” it said.
MSCI signed an investment agreement HK Binjiang in February 2020. Under the agreement, HK Binjiang will acquire a 35-percent direct investment in MCSI by purchasing 15 million common shares for $30 million, payable within 10 business days from effectivity of the agreement.
HK Binjiang will subscribe to 36 million primary common shares of MCSI for price of $72 million.
The proposed 10-kilometer subway project would connect key points in Makati such as the central business district along Ayala Ave., the Makati City Hall, the Poblacion Heritage Site, the University of Makati, Ospital ng Makati and the other new districts in the city.
The project was supposed to be completed by 2024 or 2025.