PCC keeps tabs on resurrected SM, Goldilocks deal

The Philippine Competition Commission (PCC) will look into the revived buy-in deal between Goldilocks Bakeshop Inc. and SM Investments Corp. despite claims the deal is not big enough to be within the antitrust body’s purview.

PCC Chair Arsenio Balisacan said the companies were advised way back in February this year that PCC should be informed in case the parties decide to still pursue the deal.

Prior to the latest twist in the Goldilocks deal, the transaction involved SM’s acquisition of the popular food retailer, which would have made it a subsidiary of the vast Sy empire.

The plan was dropped in January without much explanation, despite the firms getting PCC’s approval, albeit with certain conditions meant to preserve market competition.

The following month, PCC sent a notice to both parties, advising them to “inform the commission promptly” if they decide to proceed with the deal.
“We intend to send a letter to the parties requiring them to submit documents in support of the new transaction,” Balisacan told the Inquirer.

He also said merger rules provided that PCC should be informed “if another merger will be pursued in similar or related markets involving the same parties.”

In an Aug. 13 disclosure to the local bourse, SM said it was in the final stages of its acquisition of 34 percent of the outstanding capital stock of Goldilocks.

Some analysts claim the new deal is not covered by PCC’s notification thresholds, which filtered deals large enough to be potentially anticompetitive and therefore require further review by PCC.

When the original deal was approved last year, PCC noted it was concerned the retail giant would use its vast resources to give undue advantage to its new subsidiary against competitors.

PCC said the undue advantage could be in the form of manipulating available retail spaces, giving rivals bad locations and unfavorable lease terms, or even refusing to give rivals lease space.

Had the deal pushed through, SM would have been monitored for five years if it was complying with certain commitments.

In its PCC-approved voluntary commitments, SM Group promised to give Goldilocks’ competitors a fair share in lease contracts at all times. It also committed to data protection.