PCC OKs Lotte Chilsung acquisition of Pepsi shares

MANILA, Philippines — Lotte Chilsung Beverage Co. Ltd. has received the green light from the Philippine Competition Commission (PCC) to proceed with its acquisition of shares in Pepsi-Cola Products Philippines Inc. (PCPPI).

“The decision states that, upon review of the findings and recommendation of the Mergers and Acquisition Office and the submissions of Pepsi and Lotte Chilsung, the PCC finds that the proposed acquisition by Lotte Chilsung of shares will not likely result in a substantial lessening of competition,” PCPPI said in a disclosure,

The PCC “resolved to take no further action with respect to the proposed transaction between Lotte Chilsung and the (Pepsi).” 

PCPPI and Lotte sought the approval of the PCC for Lotte’s move to acquire full control of the beverage firm.

Lotte offered to  buy PCPPI shares for P1.95 each.  The tender offer period ended on Jan. 16. Lotte said it had no plans to delist PCPPI from the local bourse.  

There are also no plans relating to PCPPI that will result in any merger, reorganization, or liquidation of the company.

Last February, the Securities and Exchange Commission (SEC) directed Lotte to stop its tender offer to acquire up to 2.1 billion common shares in PCPPI. 

In its letter, the SEC directed Lotte to allow the shareholders who tendered their shares to withdraw the same for noncompliance with the Securities Regulation Code.

The SEC issued the directive as it noted the issuer of fairness opinion for the tender office price.

“Among others, the fairness opinion attached to the tender offer report filed by Lotte was issued by P&A Grant Thorton which is currently providing bookkeeping services to two entities related to PCPPI.

Established in Seoul in 1967, Lotte Chilsung, which manufactures food and beverage products, is a subsidiary of Lotte Corp.

Pepsi Philippines, meanwhile, is engaged in the manufacture, sale, and distribution of carbonated and non-carbonated beverages and snacks in the Philippines.

The PCC has, so far, received 211 mergers and acquisitions for review. 

Of the total mergers and acquisitions received, 194 deals were cleared by the PCC.

PCC reviews mergers and acquisitions to ensure such would not restrict competition in the market. – With Louella Desiderio