PCC approves hike in ICTSI stake in North Harbour Port
The Philippine Competition Commission (PCC) has approved the acquisition by International Container Terminal Services, Inc. (ICTSI) of additional shares in Manila North Harbour Port, Inc. (MNHPI) from Harbour Centre Port Terminal, Inc. (HCPTI).
ICTSI operates the Manila International Container Terminal (MICT) while MNHPI operates the Manila North Harbour Port Terminal (North Harbour). MNHPI’s largest shareholders are San Miguel Holdings Corporation and ICTSI, which have stakes of 43.33 percent and 34.83 percent, respectively.
ICTSI proposed to acquire an additional 15.17 percent shares in MNHPI to increase its shareholding to 50 percent post-transaction.
PCC said it reviewed the transaction to check whether ICTSI’s acquisition would eliminate the potential entry of a provider of port operations services for foreign containerized cargoes in the Port of Manila.
In a Commission Decision, PCC cleared the transaction after acknowledging the differences in the markets that MICT and North Harbour cater to.
The PCC found that the proposed transaction will likely result in a substantial lessening of competition in the relevant market for the provision of port operations services for foreign containerized cargoes in the Port of Manila, if not for the existing regulatory barriers to entry.
The PCC cited the concession agreements entered into by MICT and North Harbour with the Philippine Ports Authority (PPA), which restrict the type of cargo that may be coursed through MICT and North Harbour.
The PPA, through its memorandum order, also reiterated MNHPI’s contractual limitations and prohibited it from providing terminal services to foreign vessels at the North Harbour.
Given the current regulatory regime wherein North Harbour can only cater to domestic vessels transporting domestic containerized, bulk, and breakbulk cargo, the PCC found that MNHPI is not a likely entrant in the relevant market and the proposed transaction will not lead to a loss of potential competition.