THE Philippine Competition Commission (PCC) yesterday said it is yet to receive formal notice from San Miguel Corp. (SMC) subsidiary First Stronghold Cement Industries Inc. (FSCII) and Holcim Philippines Inc. (HPI) they were withdrawing from the commission’s review the transaction leading the acquisition by the former of the latter.
In. statement reacting to SMC’s disclosure to the Philippine Stock Exchange on May 11 that it will no longer pursue its acquisition of HPI, PCC reiterated the parties failed to address the anti-competition issues arising from the deal.
The commission rejected the parties’ several proposals for voluntary commitments, and after the parties had requested several extensions to file their required comment to the Statement of Concerns (SOC) submitted by the PCC’s Mergers and Acquisitions Office (MAO) to the Commission.
MAO flagged competition concerns arising from the merger such as monopoly in Northwest Luzon, and increased market power and potential collusion among inter-related cement companies controlled by FSCII in the Northeast Luzon, Central Luzon, and Greater Metro Manila areas.
PCC rejected the proposed commitments after they were found insufficient to address the competition concerns, reverting the transaction to Phase 2 review.
The Phase 2 review of the transaction, which was to end May 10, was suspended upon the parties’ submission of voluntary commitments.
The parties, however, have yet to file their respective comments to answer the competition concerns raised in the SOC.
SMC’s decision comes at a time when industries are reeling from the effects of the new coronavirus disease 2019 pandemic.
“The PCC is cognizant of the changes in market conditions during these extraordinary times, and as such, supports the promotion of business and their respective re-calibration of decisions in response to these conditions,” PCC said in a statement.
SMC’s disclosure to the stock exchange was made close to the end of PCC’s Phase 2 review of the transaction, which was suspended by Administrative Order No. 30 rendering all proceedings interrupted until the end of the community quarantine.
The commission said the May 10 deadline was internally agreed upon by the transacting parties and was within their prerogative to extend as needed.
