PCC reviews URC acquisition of CADPI sugar operations
The Philippine Competition Commission’s (PCC) is making a more detailed inquiry into the proposed acquisition by Universal Robina Corporation (URC) of the milling and refining assets of Central Azucarera Don Pedro, Inc. (CADPI) and land owned by Roxas Holdings, Inc. (Roxas Holdings), on which these assets are situated.
The PCC said its Mergers and Acquisitions Office (MAO) has decided to open a Phase 2 review within a period of 60 calendar days in order to conduct a more thorough probe.
URC will acquire all buildings, improvements, machineries and equipment, laboratory equipment, spare parts and transportation equipment located at Brgy. Lumbangan, Nasugbu, Batangas.
Through its Sugar Division, URC operates six sugar cane mills: URC – Passi in Iloilo, URC – Tolong and URC – Ursumco in Negros Oriental, URC – Sonedco in Negros Occidental, URC – Carsumco in Cagayan, and URC – Balayan in Batangas, three of which are integrated with sugar refining facilities.
On the other hand, Roxas Holdings owns 100 percent of the shares of CADPI, which operates an integrated sugar cane milling and refining plant in Nasugbu, Batangas. It is also engaged in the trading of raw and refined sugar, and molasses.
Considering the geographic market where both parties operate in Batangas, the Phase 2 review will look into whether the transaction is likely to lead to a “substantial lessening of competition” in Batangas, Cavite, Laguna, and Quezon.
The MAO also seeks to investigate whether post-transaction, there will be increased likelihood that competitors in such markets will coordinate their behavior or strengthen existing coordination in a manner that harms competition.
The MAO likewise seeks to assess whether the transaction enhances the ability and incentive of the parties to engage in foreclosure of competitors, in the markets where vertical relationships between the parties’ operations are present, such as raw sugar, refined sugar, molasses, and the provision of raw sugar refining services.