Antitrust agency hikes M&A review thresholds

THE government’s antitrust watchdog on Friday said that it was raising the thresholds for mergers and acquisitions (M&As) that will require a mandatory review.

The Philippine Competition Commission (PCC) said that starting this month, M&As in excess of a size of party (SOP) of P7.8 billion and a size of transaction (SOT) of P3.2 billion “must be notified to the PCC before they can proceed.”

The previous SOP and SOT thresholds, which were in effect from March 1, 2023 to Feb. 29, 2024, were P7 billion and P2.9 billion, respectively.

“The PCC adjusts its thresholds for compulsory notification annually based on nominal gross domestic product (GDP) growth to ensure they remain relevant to the evolving economic landscape,” it explained.

M&A transactions should exceed both thresholds to be subject to the mandatory notification, the PCC added.

SOP refers to the combined asset value or revenues of the ultimate parent entity of either party involved in the deal. SOT, meanwhile, pertains to the total asset value or revenues of the acquired entity and all its controlled units.

“The updated thresholds do not affect notifications filed before March 1, 2024, M&As currently under review, or those already reviewed and decided upon by the commission,” the antitrust regulator noted.

A total of 293 M&A transactions worth an aggregate P5.49 trillion have been reviewed by the PCC to date, 289 of which were notified to the agency.

For 2023 alone, the commission received 24 M&A notifications with a combined value of nearly P610 billion, most of which were from the real estate, electricity and gas, and information and communications sectors.

Pursuant to the Philippine Competition Act, the PCC is mandated to prohibit M&A deals that could substantially lessen competition in the relevant market.

“Even if a transaction does not breach the thresholds … the merger review mandate may be exercised motu proprio, or by its own 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,” it added.