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Thursday, August 22, 2019

102 mergers and acquisitions pass phase 1 review, says PCC

SOME 102 out of 106 mergers and acquisitions with total transactional value of roughly P1.7 trillion have been reviewed, said a key official of the Philippine Competition Commission (PCC).

So far, none of these were “blocked,” said PCC Executive Secretary Gwen Grecia-De Vera, not counting the controversial PLDT and Globe Telecom’s P69.1 billion joint purchase of San Miguel Corp.’s (SMC) telco assets.

Currently, these 102 mergers and acquisitions have been “cleared” in the phase 1 review process. De Vera said there is a second review phase, however.

Under the Philippine Competition Act, companies that enter into mergers and acquisitions amounting to P1 billion and above would have to notify PCC starting last year.

Breakdown

Data obtained during the PCC roadshow yesterday at the Marco Polo Plaza Cebu showed that the manufacturing sector dominated PCC’s list of mergers and acquisitions, amounting to P1.1 trillion.

This was followed by financial and insurance activities worth P254 billion; electricity, gas, steam and air-conditioning supply amounting to P103 billion; human health and social work activities registering P70 billion; and information and communications valued at P73 billion.

PCC is mandated under Republic Act 10667, to promote market competition for the benefit of consumers and businesses. The antitrust body is also empowered to impose significant fines and penalties on businessss that have been found to violate the Philippine Competitiom Act.

Telco asset sale

Recently, the PCC decried the decision of PLDT and Globe to proceed with the purchase of SMC’s telco assets.

“The PCC stands by its position that Globe and PLDT should not have proceeded with the payment of their final installment on the telco deal, considering pending cases filed before the Supreme Court and Court of Appeals,” a PCC statement reads.

Market impact

According to PCC, competition among companies and business results in higher income, more investment innovations, more consumer choices, and inclusive economic growth. In contrast, anti-competitive agreements restrict market competition.

An anti-competitive agreement, said PCC, includes any type or form of contract, arrangement, or understanding between or among business to fix prices or manipulate bids.

One positive impact of market competition in the Philippines is the drop in international call rates.

The de-monopolization of telecommunication companies by the early 2000s led to the lowering of international call charges from $2 per minute down to $0.40 since the emergence of Globe, Smart, Sun Cellular, Talk ‘N Text, and TM.
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