PCC clears AXA’s acquisition of XL Group

MANILA, Philippines — The Philippine Competition Commission (PCC) has cleared AXA’s acquisition of XL Group Ltd., but imposed a fine for the late filing of notification to the antitrust body.

In a statement yesterday, the PCC said the AXA-XL Group merger is the first case to be fined – amounting to P123,861.86 – for late filing of the compulsory notification.

AXA, through subsidiary Camelot Holdings Ltd., is set to merge with XL Group, with the latter becoming a wholly owned subsidiary of AXA.

Under the PCC rules on merger procedure, firms should file their notification within 30 days after signing the definitive agreement.

If the firms notify beyond the 30-day period, but before consummating the transaction, they may be subjected to a fine of one-half of one percent of the value of transaction.

In the case of the AXA-XL Group merger, the notification should have been filed on or before April 4, as the definitive agreement was signed on March 5. 

The firms notified the antitrust body of the transaction on June 25, or 112 days after the signing of the merger agreement.

Upon subsequent review, the PCC approved the transaction on Aug.16, as it is not expected to result in reduced competition.

“We urge firms to observe a standard of diligence in complying with notification requirements across countries whether large or small. Merging parties that file after the notification period, even prior to consummation of the deal, will be fined,” PCC chairman Arsenio Balisacan said.

Once the parties have transferred, conveyed, assigned, encumbered any right, title, interest, property or asset that is the subject of the definitive agreement, the merger or acquisition is already considered consummated.

To help in the timing of notifications, the PCC provides pre-notification consultation which covers non-binding advice on required information needed, guidance on thresholds, and markets covered by merging firms.

Aside from filing notification before the PCC, both AXA and XL have global operations requiring 11 notifications to be filed with different competition authorities.

AXA, which handles life insurance, is the holding company of the AXA Group which has presence in Europe, the US, the Middle East, Latin America and Asia.

In the Philippines, AXA Group operates though Philippines AXA Life Insurance Corp.

Meanwhile, XL Group, which provides non-life insurance, provides casualty, property and specialty products to enterprises in North America, London, Asia Pacific and Bermuda.

The PCC is mandated to review mergers and acquisitions to promote competition in the market and protect consumer interest.

To date, the PCC has received 154 transactions including 44 global mergers, and approved 143 deals.