Rules on M&A review out

    The major banks in the Philippines are located in the Makati Central Business District.

    The exemption from mandatory review by the anti-trust body on mergers and acquisitions (M&A) below P50 billion provided under the Bayanihan We Recover as One Act took effect yesterday.

    But the Philippine Competition Commission (PCC) said it still retains oversight for M&As worth at “least P50 billion” or those that were entered into before the effectivity of Bayanihan 2 and those which exceed the applicable thresholds when the definitive agreement was signed.

    The rules on the exemptions from compulsory notification and motu proprio review, computation of new thresholds, and the option for voluntary notification of M&A transactions provided under Bayanihan 2 were published yesterday.

    The exemption from compulsory notification covers M&As with transaction values below P50 billion if entered into within two years from the effectivity of Bayanihan 2 on Sept. 15 15, 2020. The law suspends PCC’s exercise of motu proprio review for the transactions for one year.

    Prior to this, the M&A transaction thresholds for mandatory PCC review was pegged at P2.4 billion. Entities entering into an M&A that has an asset worth P6 billion also have to submit their transaction to PCC review.

    The PCC said it is reviewing fivr transactions notified before Bayanihan 2’s effectivity.

    The PCC meanwhile said its power for a motu proprio review remains intact for transactions that were entered into before the effectivity of Bayanihan 2 and have not yet been the subject of PCC review, as well as those pending review by PCC before the effectivity of the law.

    “M&As that are likely to substantially lessen competition may be reviewed motu proprio after one year from Bayanihan 2’s effectivity,” the PCC said.

    It said that parties to M&As below the P50-billion threshold “may choose to voluntarily notify their transaction to undergo merger review. In its discretion, the PCC may give due course to the voluntary notification, with review periods of 45 days for Phase one and 90 days for Phase two.”

    “With fewer merger notifications expected, the PCC will intensify action in other areas of enforcing the competition law especially against anti-competitive agreements and abusive practices that harm consumers or unscrupulously take advantage of the crisis,” said PCC chairman Arsenio Balisacan.