PLDT, Globe reject PCC request to refile notice on SMC telco deal
Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom turned down a request from the Philippine Competition Commission (PCC) asking them to resubmit a notice on their massive deal to take over San Miguel Corp.’s (SMC) telco unit, setting the stage for an early conflict with the government antitrust watchdog.
Globe Telecom general legal counsel Froilan Castelo said in a text message Friday the acquiring parities have already given their reply to the PCC on the matter.
“We won’t refile. Notice is compliant,” Castelo said.
The competition commission reportedly rejected the initial notice filed by Globe and PLDT before they announced last May 30 a joint deal to buy out SMC’s Vega Telecom for about P70 billion. It was reported that their initial notice to the PCC had incomplete information.
Arsenio Balisacan, chair of the country’s competition commission, did not immediately respond to a text message Friday night.
Vega is the holding company for SMC’s telecommunications assets. Its units control valuable radio frequencies especially those in the coveted 700 megahertz band, the main target of the deal. PLDT and Globe said the additional, unused frequencies were needed to bolster the quality of mobile internet as both dodged complaints over “slow and expensive” broadband.
The acquisition also ended SMC’s dramatic bid to become the country’s third telco player, a prospect that already grew dim after SMC’s talks with Australia’s Telstra Corp. Ltd. collapsed last March.
Lawyers from both PLDT and Globe argued the transaction was deemed approved and all that was needed was for them to file a notice to the PCC. They said this was because the PCC’s implementing rules were not yet finalized. The PCC released its implementing rules on June 3, days after the telco deal was sealed. The rules will take effect after 15 days.
Despite this, the PCC took a firm stand that the transaction, described as its first major test, still needed its final approval.
“The mere filing of a notification with the PCC does not guarantee a ‘deemed approved’ status for the subject transaction, even under the transitory rules. Parties to a proposed merger and acquisition cannot make the determination of whether a transaction is deemed approved; this is for the PCC to determine,” the PCC said.
“More specifically, it has been erroneously claimed that transactions entered into and reported to the PCC prior to the publication of the implementing rules and regulations of the Philippine Competition Act fall outside of PCC’s authority to review because these are ‘deemed approved’ under the applicable memorandum circulars. This is not accurate,” it added.
It further clarified that provisions of the law are “fully in effect and do not require the final issuance of IRR to trigger effectivity.”
“The PCC conducts full and expeditious review of a notification of transaction only after receipt of complete information. Under the law, the purpose of such a review is to prevent anticompetitive mergers and acquisitions. In its review, the PCC exercises all powers granted by the law,” it said.
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