The Philippine Competition Commission (PCC) has been notified of over P2 trillion worth of merger and acquisition transactions since last year, an official said.
Lianne Ivy Pascua-Medina, an attorney in PCC’s mergers and acquisitions office, said in a media seminar on Tuesday that PCC has received 124 transactions as of Friday last week.
This pertains to transactions that meet the P1 billion transaction threshold set by the PCC’s enabling law – a value that some members of the business community deemed too low.
However, following a preliminary review, PCC said in a policy statement it found “sound basis” to keep the current threshold “at least in the short term.”
“As of Friday last week, we have already received notifications for 124 transactions. The value of the transactions is around P2 trillion,” she said when asked for an update.
Later, she said in an interview on the sidelines of the seminar that only four of these transactions entered the second phase of the PCC review, wherein additional information was asked in order to see if the deals could substantially lessen competition. The decisions for some of these deals were still pending.
The MAO office scrutinizes mergers and acquisitions in order to determine which are likely to substantially lessen the competition in the market, a process that could take one to three months depending on the sufficiency of information made available by the parties involved, among other sources.
Friday last week also marked the day the latest PCC rules on merger procedure have taken in effect, she said. It was published in a newspaper of general circulation in late November.
She said this would be applicable to cases that were pending in PCC on the effectivity of the new rules last week and those that would be filed in the future.
Explaining the notable changes from previous rules, Pascua-Medina said that companies would no longer be required to notify the PCC before signing any definitive agreement.
In a clarificatory note posted on its website, PCC said that a definitive agreement should lay down the “complete and final terms and conditions” of the deal. This may take in the form of a share purchase agreement, an asset agreement, a joint venture agreement, among others.
“The notification period has been moved,” Pascua-Medina said. “Whereas before, parties are required to notify the commission before signing the definitive agreement. Now they may notify within 30 days after said definitive agreement has been signed.”
The new rules have also softened the penalties for firms that may issue late notifications as long as the deal has not been consummated in any way. The fine is only half of one percent of one percent of the value of transaction, but not exceeding P2 million.
However, failing to notify a consummated agreement would result to a fine equivalent to one to five percent of the value of transaction. /atm