PCC likely to extend review of San Miguel-Holcim deal

The Philippine Competition Commission (PCC) will likely look deeper into San Miguel Corp.’s (SMC) takeover deal of Holcim Philippines Inc. (HPI).

After initially looking into the $2.15-billion deal, the PCC has requested the parties for more information, extending the review process of what could be the largest merger and acquisition deal in the local cement industry.

“We have requested more information,” PCC Chair Arsenio Balisacan told reporters on Thursday. He did not expound on the specifics.

“Under the rules, if the commission is not able to decide on the case within 30 days and needs more information to effectively evaluate the case, it asks the parties to provide more information,” he said.

Under the competition law, mergers and acquisitions that are deemed large enough to be potentially anticompetitive are subject to the PCC’s 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 the Department of Trade and Industry (DTI) announced that it had decided to impose a safeguard duty on imported cement that would last for three years.

The safeguard duty will benefit large local cement makers such as Holcim, which the DTI said had been injured by the surge in imports in the past few years.

“Of course, that affects their profitability. But the issue here is if the merger is anticompetitive. Will it substantially lessen competition? So it’s a different question,” Balisacan said.

The PCC is currently investigating a possible cartel in the local cement industry, although details about this probe such as who exactly are involved—have been kept secret.

Balisacan, however, had previously clarified that the SMC-HPI takeover deal was “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.