PCC starts reviewing Chelsea-Trans Asia deal

THE Philippine Competition Commission (PCC) said on Wednesday it had begun reviewing shipping firm Chelsea Logistics Holding Corp.’s acquisition of Trans Asia Shipping Lines Inc. after the two properly notified the state-run agency about it last month.

The review came after the PCC held a September 17 hearing, during which it said Dennis Uy, president of Chelsea Logistics’ parent firm Udenna Corp., and other company representatives “signified their intent to comply with the compulsory notification requirements.”

“They further expressed their willingness to offer voluntary commitments to address the competition concerns arising from Udenna’s concurrent ownership of 2Go and Trans Asia,” it said.

“These include the commitment to be bound by a price-monitoring scheme and provide necessary information to implement the same,” it added.

The commission considered these as mitigating factors, and imposed an administrative fine that is 1 percent of the transaction value amounting to P11.4 million—a 50-percent cut of an earlier penalty of P22.8 million.

The hearing came after the PCC had invalidated the Chelsea-Trans Asia acquisition. The nullifcation was a factor in the commission’s conditional clearance of the Udenna shipping subsidiary’s acquisition of shares in Dutch company KGLI- NM Holdings Inc., which has a majority stake in Negros Navigation Co. Inc. ( Nenaco), the parent company of 2Go Group Inc.

Chelsea and Udenna had argued that the Trans-Asia deal fell below the P1-billion compulsory notification threshold, as the stake involved was only worth P205.3 million.

“Compliance is the cornerstone of fostering a culture of competition. The competition law is fair, as it rewards faithful observance of the rules while it penalizes violations,” PCC Chairman Arsenio M. Balisacan said.

Based on its previous review of the ChelseaKGLI-NM transaction, the PCC found that it would lead to a substantial lessening of competition.