PCC raises merger notification thresholds

‘The updated thresholds do not affect notifications filed before 1 March 2024, M&As currently under review, or those already reviewed and decided upon by the Commission.’

The anti-trust body, Philippine Competition Commission on Friday announced that thresholds for transactions that will undergo mandatory merger review have already increased.

According to PCC, mergers and acquisitions that exceed the size of the party of P7.8 billion and a size of transaction of P3.2 billion must be notified to the PCC before they can proceed, effective 1 March 2024.

It said that they adjusted the thresholds for compulsory notification annually based on nominal gross domestic product growth to ensure they remain relevant to the evolving economic landscape.

In 2023, the Philippines recorded a 10.3 percent nominal GDP growth based on data from the Philippine Statistics Authority.

The PCC said that for a merger or acquisition to be subject to compulsory notification from them, both the SOP and SOT thresholds must be exceeded.

SOP pertains to the aggregate value of assets or revenues of the ultimate parent entity of either party involved in the transaction, while SOT refers to the total value of assets or revenues of the acquired entity and all its controlled entities.

“The updated thresholds do not affect notifications filed before 1 March 2024, M&As currently under review, or those already reviewed and decided upon by the Commission,” the PCC said in a statement on Friday.

Currently, the PCC has reviewed a total of 293 M&A transactions, collectively valued at more than P5.49 trillion, of which 289 were notified to the Commission.

In 2023 alone, the PCC received 24 notifications of M&A transactions worth almost P610 billion, the majority of which came from the real estate, electricity and gas, and the information and communication sectors.

The PCC is mandated by the Philippine Competition Act to review M&As and prohibit transactions that will substantially lessen competition in the relevant market.

Although a transaction does not breach the thresholds, the PCC’s merger review mandate may be exercised motu proprio, or by its initiative, if it finds reasonable grounds that the transaction is likely to result in a substantial lessening of competition or has led to such given preliminary indications.