PCC resumes review of M&AS
The Philippine Competition Commission (PCC) has resumed the motu proprio review of mergers and acquisition (M&A) applications following the expiration of the one-year moratorium under the Bayanihan to Recover as One Act (Bayanihan 2).
The competition watchdog noted that the ban on M&A review has been lifted after Bayanihan 2 expired on September 15. The Bayanihan 2 increased the compulsory merger notification threshold to P50 billion for two years, in addition to suspending the PCC’S power to review non-notifiable M&AS.
PCC said there have been only four transactions above the P50-billion threshold since Bayanihan 2 was enacted in September last year. The old thresholds were used for the review of the other three transactions during the period.
The prevailing size of transaction threshold and size of party were P2.4 billion and P6 billion, respectively, prior to the passage of Bayanihan 2.
“With the year-long suspension lifted, and based on its increased market monitoring efforts, PCC can now launch motu proprio reviews and flag M&AS which may have potentially anti-competitive effects regardless of any transaction value,” PCC Chairperson Arsenio M. Balisacan said.
The motu proprio review, PCC said, is part of the agency’s market surveillance function allowing it to look into M&A transactions that can substantially lessen market competition.
The investigation also applies to transactions that do not meet the threshold for compulsory notification.
“We are hopeful that the return of PCC’S motu proprio review powers would discourage deals that are potentially anti-competitive. We continue to encourage firms to voluntarily notify the Commission to avoid the taxing possibility of unwinding their transactions after,” the PCC chief said.
“Keeping watch over M&AS in the post-covid-19 economic environment is critical to ensure that consolidation does not remain unchecked and is not allowed to lead to highly concentrated markets.”
PCC said M&A notifications declined as only 26 applications were filed last year from 46 in 2019. For this year, the agency received four notifications.
As of September 14, the competition authority has received 225 M&A transactions amounting to P4.56 trillion. These mostly came from manufacturing, financial and insurance, real estate, electricity and gas and transportation and storage sectors.