PCC OKs share buyback by Pro-Friends in GT Capital

MANILA, Philippines — The Philippine Competition Commission (PCC) has approved the buyback of shares by Property Company of Friends Inc. (Pro-Friends) from GT Capital Holdings Inc. and the acquisition by Saudi Arabian Oil Co. (Saudi Aramco) of chemical and industrial polymer manufacturer Saudi Basic Industries Corp. (SABIC) which has operations in the Philippines.

In a decision dated July 4, PCC said it has cleared the transaction between Pro-Friends and GT Capital as it is not seen to result in reduced competition in the market.

The deal involves Pro-Friends’ redemption of Series A preferred shares, equivalent to a 51 percent stake in the company, from previous partner GT Capital in exchange for 702.44 hectares of land from its Lancaster New City development project in Cavite.

Pro-Friends’ redemption of shares from GT Capital would result in Maplecrest Group Inc. having sole control over the property company.

At present, Maplecrest holds a 49 percent stake in Pro-Friends, which is focused on mass housing with projects in Cavite and Iloilo.

GT Capital initially acquired 22.7 percent of Pro-Friends in 2015, and then increased its stake to 51 percent by buying an additional 28.3 percent the following year, to complement property development arm Federal Land Inc.

Apart from property development, GT Capital is involved in other businesses such as banking; automotive assembly, importation, distribution and financing; life and non-life insurance; and infrastructure and utilities.

PCC said it approved the deal “because there are no horizontal or vertical overlaps between Pro-Friends and Maplecrest’s respective business activities; and the transaction will not alter the current structure of the market.”

In a separate commission decision also dated July 4, the PCC said it gave the go signal for Saudi Aramco’s acquisition of 70 percent of SABIC’s shares held by the Public Investment Fund of Saudi Arabia (PIF).

“Upon review of the findings and recommendation of the Mergers and Acquisitions Office and the parties’ submissions, the commission finds that the proposed acquisition by Aramco of shares in SABIC will not likely result in substantial lessening of competition. This is because the candidate relevant geographic market of the acquisition is global and the parties have negligible or limited presence in the Philippines; and post-transaction, there remains sufficient competitive constraints from other market participants in the global market for high density polyethylene; linear low density polyethylene; and homopolymers or in the markets of polyethylene or polypropylene,” PCC said.

Saudi Aramco, based in Saudi Arabia, is involved in the exploration, production and marketing of crude oil, as well as production and marketing of refined products and petrochemicals.

SABIC, the firm which was incorporated in Saudi Arabia and listed on the Saudi Stock Exchange, is engaged in the production and sale of commodity chemicals, intermediates, polymers, fertilizers, as well as metals.