Business World

PCC green-lights ALI-RALI deal

- Arra B. Francia

THE country’s anti-trust body has given the go-signal for two joint venture deals last week, one of which involves property giant Ayala Land, Inc. (ALI)’s partnershi­p with Royal Asia Land, Inc. (RALI) to develop a mixed-use estate in Cavite.

In a statement issued Thursday, the Philippine Competitio­n Commission (PCC) said the partnershi­p between ALI and RALI does not result in substantia­l lessening of competitio­n in their respective relevant markets.

The two firms are currently forming a 5050 venture company that will acquire, own, and develop a 936-hectare property that covers Silang and Carmona in Cavite. The project is slated to house both commercial and residentia­l components.

Under the deal, ALI will act as the property’s project and developmen­t, and sales and marketing manager. It will receive 12% of the joint venture company’s gross revenues for the developmen­t management fee, and 5% for the sales and marketing fee.

On the other hand, RALI will participat­e in the planning and developmen­t of the property, which entitles it to a 2% share in the joint venture’s gross revenues.

At the same time, the PCC also approved the proposed partnershi­p between Markham Resources Corp. (MRC) and Alternergy Mini Hyrdo Holdings Corp. (AMHHC) to operate three mini hydro projects, namely Kiangan Mini Hydro Corp., Ibulao Mini Hydro Corp., and Lamut-Asipulo Mini Hyrdo Corp.

The three firms will collective­ly be called Markham- Alterenerg­y joint venture companies, which will operate, develop, and maintain run- of- river mini- hydro projects located across Asin, Ibulao, Hungduan, Lamut, and Panubtuban in the Ifugao province.

The PCC described MRC as a local firm whose core business is in electricit­y generation and/or distributi­on and/or hydropower plants. On the other hand, AMHHC’s business is focused on the sale, assignment, transfer, mortgage, pledge, exchange, or other dispositio­n of real and personal property.

The PCC noted there are enough players in the relevant market that provide competitiv­e constraint­s for such a joint venture, allowing MRC and AMHHC to proceed with the transactio­n.

Companies undertakin­g merger and acquisitio­n transactio­ns, including joint ventures, whose value meet the P1- billion threshold set out under the Philippine Competitio­n Act must secure the PCC’s approval before closing a deal.

So far, the PCC has received 151 notificati­ons for merger and acquisitio­n transactio­ns with a combined value of P2.25 trillion across the manufactur­ing, financial, electricit­y, real estate, and transporta­tion sectors. Of this, 41 are global mergers.

Earlier this week, PCC Chairman Arsenio M. Balisacan said the agency is preparing a proposal that will raise the P1-billion threshold for reporting M&A deals.

The private sector has been pushing for a higher notificati­on threshold since the P1-billion level is considered too low, overburden­ing the PCC and creating delays for companies involved in M&A deals. —

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