SMC abandons Holcim buy as PCC closes to end review

BUSINESS
May 15, 2020

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THE Philippine Competition Commission (PCC) has learned that San Miguel Corp. (SMC) pulled out its plan of acquiring Holcim Philippines, Inc. (HPI) when the antitrust body is nearly finished with the second phase of the review of the transaction.
    SMC made a disclosure to the Philippine Stock Exchange Monday about backing out from the deal but PCC said it has yet to receive formal notice from both parties withdrawing the transaction.
    SMC subsidiary First Stronghold Cement Industries Inc. (FSCII) will no longer buy the 85.73 percent share of HPI after the agreement has expired in accordance with its terms.
    The acquisition deal amounts to USD2.15 billion.
    “The Commission notes that the 10 May 2020 deadline was internally agreed upon by the transacting parties and was within their prerogative to extend as needed,” the PCC said in a statement Tuesday.
    The PCC is doing the Phase 2 review of the transaction but was suspended, along with all proceedings, due to the enhanced community quarantine.
    SMC and HPI have yet to get PCC’s nod after its Merger and Acquisition Office flagged competition concerns arising from the transaction, such as monopoly in Northwest Luzon and increased market power and potential collusion among inter-related cement companies controlled by FSCII in the Northeast Luzon, Central Luzon, and Greater Metro Manila areas.
    “The Phase 2 review of the transaction was suspended upon the parties’ submission of voluntary commitments. PCC rejected the proposed commitments after they were found insufficient to address the competition concerns, reverting the transaction to Phase 2 review. The parties, however, have yet to file their respective comments to answer the competition concerns raised in the SOC,” the antitrust body said. (PNA)

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