PCC raises M&A notification thresholds

Competition watchdog Philippine Competition Commission (PCC) has raised the thresholds for compulsory notifications of mergers and acquisitions (M&As).

The PCC said the thresholds for M&As that need approval were increased to P7.8 billion from P7 billion for size of party (SOP) and P3.2 billion from P2.9 billion for size of transaction (SOT).

“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,” the agency said.

Data from the Philippine Statistics Authority (PSA) showed the Philippines recorded a 10.3 percent nominal GDP growth in 2023.

“For a merger or acquisition to be subject to compulsory notification to the PCC, both the SOP and SOT thresholds must be exceeded,” the PCC said.

The 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 PCC, however, emphasized that even if a transaction does not breach the thresholds, its 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.

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

The PCC has so far reviewed a total of 293 M&A transactions worth P5.49 trillion, of which 289 were notified to the Commission.

In 2023 alone, the PCC received 24 notifications of M&A transactions valued almost P610 billion.

Majority of the transactions came from the real estate, electricity and gas, as well as the information and communication sectors.

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