THE Philippine Competition Commission (PCC) has green-lighted the proposed acquisition by Korean beverage maker Lotte Chilsung Beverage Co. Ltd. of the publicly-owned shares in listed Pepsi-Cola Products Philippines Inc.
The PCC said the transaction is not likely to result in substantial lessening of competition in the market.
“The Commission based this finding upon the Mergers and Acquisitions Office’s assessment that there remains sufficient competitive constraints in the market for the supply of carbonated soft drinks, non-carbonated beverage, and bottled water in the country,” it said.
“Additionally, it was found that the share acquisition will not likely give the parties an increased ability or incentive to engage in input or customer foreclosure, in the global market for the supply of polyethylene terephtalate (PET) and the national market for the distribution of non-alcoholic beverages,” the PCC added.
The transaction involves Lotte Chilsung Beverage’s acquisition of up to 2.13 billion common shares of Pepsi-Cola Products Philippines, through a tender offer to all shareholders, other than its mother company Lotte Corp. and excluded shareholders, representing 57.78 percent of Pepsi-Cola Products Philippines’ total issued and outstanding capital stock.
Lotte in December offered to buy the publicly-owned shares in Pepsi-Cola Products Philippines at P1.95, a 12.27 percent premium over the six-month volume weighted average price (VWAP) and a 6.14 percent premium over the three-month VWAP of the company’s common shares then.
Lotte Chilsung Beverage is a subsidiary of Lotte, which in turn is one of the principal shareholders in Pepsi-Cola Products Philippines.
Pepsi-Cola Products Philippines is engaged in the manufacturing, sale and distribution of carbonated and non-carbonated beverages, and snacks in the country.
