Philippine Competition Commission Chairman Arsenio Balisacan. INQUIRER FILE PHOTO
MANILA, Philippines–San Miguel Corp. (SMC) and Holcim Philippines, Inc. (HPI) have not yet notified the country’s antitrust body about their takeover deal, keeping the government from looking into the largest merger and acquisition deal in the local cement industry.
The Philippine Competition Commission (PCC) said that it has not yet received any notification about the $2.15-billion deal, which, if approved, will see the country’s largest cement maker back in the hands of a Filipino company.
After earlier media reports that said SMC was confident it would pass PCC scrutiny, the competition watchdog reminded the parties involved that they have to notify PCC about the deal within 30 days from signing their definitive agreement.
“To date, the [PCC] has not yet received the notification by [SMC] and [HPI] for mandatory merger review,” said PCC Chairman Arsenio Balisacan in a statement on Friday.
As with any other deal under review, Balisacan said a transaction will be approved in a “timely manner” if it is not anticompetitive. Otherwise, there are ways under the law to address those concerns, he said.
“As such, any expression of speculation on how the merger review will fare is discouraged. Parties should instead comply and submit notification requirements in accordance with the rules,” he added.
Under competition law, mergers and acquisitions that are deemed large enough to be potentially anti-competitive are required to be notified to PCC for a review.
First Stronghold Cement Industries, Inc. will buy 85.73 percent of Holcim Philippines. First Stronghold is a wholly owned unit of San Miguel Equity Investments Inc., a subsidiary of SMC.
This develops as PCC is currently investigating a possible cartel in the local cement industry, although latest details and even updates about this probe — such as who exactly are involved — have been kept secret.
Balisacan, however, clarified that the SMC-HPI takeover deal is “different” from this ongoing investigation.
“Unlike cartel investigations which look into past conduct, merger reviews are carried out to determine any competition concerns before the transaction is consummated to prevent potential damage to consumers,” he said.
The deal comes at a time as multinational cement firms in the country, including Holcim, claim that they have recently saw their profitability decline due to their competition with cheaper imports, the volumes of which surged in the past few years.
The Tariff Commission, an entirely different body, is currently looking into the issue on imported cement, an investigation which will decide whether or not to impose a definitive safeguard measure. (Editor: Jonathan P. Vicente)