M&As value hit P909B in ’20


    The Philippine Competition Commission (PCC) said it has reviewed P909 billion worth of transactions in 2020, indicative of a healthy appetite for mergers and acquisitions (M&As) despite the pandemic.

    In a yearend report, PCC chairman Arsenio Balisacan said the Commission will also continue to monitor priority markets for possible mergers and acquisitions (M&As) that substantially lessen competition, by encouraging the private sector for voluntary notification of the agency.

    As the Bayanihan II Act suspended the PCC’s motu proprio power to review M&A last year, the agency has refocused resources to capacity building and market monitoring to gear up for the return of motu proprio review powers by September this year.

    “We also continued to encourage firms to voluntarily notify the Commission of their M&A transactions to avoid the possible unwinding of these transactions should these be found anti-competitive after motu proprio review,” he said.

    Of the P909 billion transactions reviewed by the PCC last year, 20 got approved, one withdrawn, two returned, and three in different review stages, Balisacan noted.

    “The sectors with the most transactions are electricity and gas (six) and transportation and storage (five). Manufacturing, finance and insurance, and real estate each had three transactions,” he said.

    Balisacan said that despite the constraints due to community quarantine restrictions, the PCC completed all reviews well within the statutory periods, which include the approved acquisition by Universal Robina Corporation (URC) of assets in Central Azucarera de la Carlota, Inc. (CA-Carlota) and Roxol Bioenergy Corp. (Roxol), and shares in Najalin Agri-ventures, Inc. (NAVI) in Negros Island, a year after a similar transaction by the same parties was blocked for the merger-to-monopoly concerns in Batangas.  “Further, in light of Bayanihan II and given the heightened risks of anti-competitive behavior amid the crisis, we have deployed many of our staff from the Mergers and Acquisitions Office to our Enforcement Office to work on abuse of dominance cases,” he added.

    Balisacan said with the COVID-19 pandemic ushering an economic recession, it has heightened the risk of anti-competitive behavior “as firms struggle to cope with narrower margins.”

    “Firm closures and increased appetite for mergers and acquisitions (M&As) may also cause market power to become even more concentrated. Government responses to the crisis themselves may also have unintended anticompetitive effects,” he said.

    “All these can exacerbate the already significant economic losses from the pandemic as inequality worsens and the playing field is further distorted, especially for micro, small, and medium enterprises (MSMEs). Lessened competition, increased capacity of dominant players to abuse market power, and distorted market structures also stifle long-term prospects for innovation, growth, and consumer welfare,” he added.

    These has made the need for “a more robust competition regime” more relevant and critical in order to protect Filipino consumers and businesses alike andensure a durable and inclusive recovery, he said.

    PCC vowed to continue to “effectively investigate and enforce prohibitions against anti-competitive agreements and conduct” amid the changing competition enforcement environment this year as a result of the coronavirus disease 2019.