PCC green-lights ALI-RALI deal
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. —