As part of its effort to ease doing business in the country, the government has fast-tracked the review process for merger and acquisition (M&A) transactions that are less likely to lead to a monopoly in local industries.
Philippine Competition Commission (PCC)
The Philippine Competition Commission (PCC) laid out the rules for what it calls an “expedited review process.” Taking effect on July 2, 2019, the resolution cuts the review period for the approval of mergers and acquisitions for businesses operating in the Philippines to half the usual time. From 30 calendar days upon receipt of the merger application the process now takes just 15 working days.
The review of mergers and acquisitions is conducted by the PCC to ensure that these deals do not lessen competition in the market to the detriment of consumers.
While the Philippines’ previous 30-day review process was already among the shortest in the world, the move to an even shorter 15-day timetable reinforces the government’s commitment to greater efficiency in processing merger applications.
Interested parties may opt to undergo the free pre-notification consultation offered by the PCC, which helps determine if transactions qualify for the expedited review process. Firms that wish to qualify for the speedy review need to apply within 30 days after signing the definitive merger agreement.
Who’s qualified?
Transactions qualified for the faster PCC track review are:
• Those which do not involve overlaps in businesses between the surviving entity and the acquired company;
• Foreign firms aiming to gain a Philippine subsidiary to manufacture or assemble their products, with the aim of exporting at least 95% of their goods.
• Global transactions wherein both the acquiring and acquired entities have “negligible or limited presence” in the country.
• Joint ventures created purely for the construction and development of a residential or commercial real estate project, which aligns with the government’s aggressive push for its “Build, Build, Build” infrastructure initiative.
The PCC’s experience in reviewing mergers and acquisitions shows that disposing of these types of transactions quickly would benefit not only the parties involved, but would also boost efficiency in use of the PCC’s resources towards the implementation of a more “holistic merger control regime.”
The antitrust body guards against monopolies in certain sectors so that public can gain access to more choices, lower prices, and a higher quality of goods.
Latest statistics
As of mid-year 2019, the PCC had received 184 notifications, most of them in the manufacturing sector. Of this total, 174, totaling P2.87 trillion in accumulated transaction value, were approved. Only one, a planned merger of two sugar mills in Southern Luzon was blocked.
The top five most active sectors for mergers and acquisitions are manufacturing with 42 transactions; finance and insurance with 30; real estate with 24; electricity and gas with 24; and transportation and storage with 13.
The PCC said this move was in accordance with the Duterte administration’s push to provide more investor-friendly processes in the Philippines.
Learn more about expedited merger reviews through the experts at Duran & Duran-Schulze Law. Call (+632) 478 5826 or email info@duranschulze.com for inquiries.
https://www.rappler.com/business/233353-philippine-competition-commission-speeds-up-review-qualified-deals-by-15-days
https://pia.gov.ph/news/articles/1023416
https://www.philstar.com/business/2019/06/19/1927609/pcc-shortens-ma-review-period https://www.cnnphilippines.com/business/2019/6/18/Philippine-Competition-Commission-merger-deal-review.html
https://www.bakermckenzie.com/en/insight/publications/2019/07/philippine-competition-commission-offers-expedited
https://www.bworldonline.com/faster-review-of-some-mas-allowed/