PCC starts review of Udenna purchase of Malampaya stake

MANILA, Philippines —  The Philippine Competition Commission (PCC) is preparing its review of Udenna Corp.’s acquisition of Chevron Philippines Ltd.’s 45 percent stake in the Malampaya gas field after being notified of the transaction.

The antitrust body is also set to release soon the result of its evaluation of an offer for voluntary commitments submitted by parties in relation to the acquisition by San Miguel Corp. (SMC) of Holcim Philippines Inc. (HPI).

PCC chairman Arsenio Balisacan told reporters yesterday the body has been notified of the Udenna-Chevron transaction.

“It’s at the sufficiency determination stage. They have submitted, but we are looking at whether the papers are complete. If it is not yet complete, we will ask the parties to submit.

Only when it is complete will we start the Phase 1 (review),” he said.

Last month, Udenna Corp. announced its subsidiary UC Malampaya Philippines Pte. Ltd. bought 100 percent of the shares of Chevron Malampaya LLC, which holds Chevron Philippines’ non-operated interest in the Malampaya gas field.

The Malampaya project is operated by Shell Philippines Exploration BV, with state-run Philippine National Oil Co. as the third joint venture partner.

Located off the coast of Palawan, the Malampaya gas field serves approximately 20 percent of the country’s electricity demand.

Meanwhile, Balisacan said the PCC is also set to issue the result of the assessment of voluntary commitments offered by parties on the SMC-HPI transaction.

“In the next couple of days, the MAO (mergers and acquisitions office) will release information about the VC (voluntary commitments) and about the statement of concern,” he said.

An offer for voluntary commitments to address competition concerns on the SMC-HPI deal was submitted to the PCC last October.

The transaction involves the acquisition of an 85.7 percent stake in HPI by First Stronghold Cement Industries Inc., a wholly owned subsidiary of San Miguel Equity Investments Inc., which in turn is a wholly owned subsidiary of SMC.

PCC’s initial findings on the deal showed the transaction may affect market concentration of relevant products in many parts of Luzon, as well as Northern and Southern Mindanao.

Balisacan declined to provide details on the voluntary commitments offered in relation to the transaction.

Earlier, SMC president and chief operating officer Ramon Ang said the group is willing to address the concerns of the PCC.

He is likewise open to divest his stake or the company’s stake in other cement firms.

After the MAO’s assessment of voluntary commitments, it would make a recommendation to the commission, which would then make the final decision.

PCC is mandated by law to review mergers and acquisitions to make sure the deals do not go against consumer interest.