San Miguel Corp. will have to divest some of the assets it plans to acquire from Holcim Philippines or be subject to scrutiny post merger to address the competition issue of the planned buyout, according to the Philippine Competition Commission (PCC).
PCC commissioner Johaness Bernabe said Holcim and San Miguel have submitted last month to the mergers office a set of voluntary commitments aimed at addressing the competition issue that will arise from their merger.
Bernabe said the phase two review which is “a more detailed analysis of the transaction” is suspended for 60 days while the mergers office is reviewing whether or not such commitments are sufficient to address competition issues.
Bernabe said there are two forms of voluntary commitments : one is structural which requires the divestment of certain assets subject of the acquisition while the other is behavioral where the transaction will be allowed to proceed subject to close disciplining of the merged party.
“The behavioral voluntary commitment is similar to what PCC has done to Grab (Philippines) when it was not allowed to price its rates beyond certain levels and TQMP Glass Manufacturing Corp. which was told to treat all its suppliers and end-users in a fair, reasonable and non-discriminatory manner,” Bernabe added.
The mergers office has 60 days to review the commitments after which it would recommend to the Commission whether or not they are sufficient to address competition issues.
If these do not satisfy the requirements, the phase two review will resume.
The first review found the deal could lead to a cartel-like coordination among cement firms in several regions.
The Phase 2 review will also assess whether there will be an increased likelihood of cartel-like coordination among cement firms operating in the identified geographic areas
San Miguel acquired 85.7 percent of Holcim Philippines for $2.15 billion in May 2019.
SMC, through its First Stronghold Cement Industries Inc. subsidiary, has interests in other cement companies e Northern Cement Corporation, Oro Cemento and Eagle Cement.