MANILA, Philippines — Antitrust regulators have cleared ports and casino magnate Enrique Razon's bid to take control of Ayala-led Manila Water Company Inc., saying the move would not lessen competition.
In a statement, the Philippine Competition Commission (PCC) approved the acquisition of a controlling stake by Razon's own water company, Trident Water Holdings Company Inc., the holding firm of Prime Metroline Holdings Inc., in Manila Water which supplies water to parts of the metropolis, Cavite and Bulacan.
"The PCC finds that the transaction will not likely lead to substantial lessening of competition in the market of the supply of raw water to the East Zone Concession Area," the commission said.
"This is because Manila Water, as the sole water distributor in the East Zone geographic market, has a captive customer base and no downstream competitors based on a concession agreement Manila Waterworks and Sewerage System," it added.
In February, Razon, seen in better standing with President Rodrigo Duterte than other business magnates, acquired a 25-percent stake in the Ayala-led water firm, a move that appeared meant to temper Duterte's attacks over last year's water shortage and an arbitral court order that ordered government to pay P7.4 billion to the company.
While Ayala Corp. was still left with a bigger 31.6% ownership of the company, the transaction gave Razon 51% voting interest in Manila Water, enabling the tycoon to make strategic decisions for the firm at the receiving end of Duterte's ire.
"The Transaction does not strengthen the Parties' ability or incentive to engage in input or customer foreclosure in the market for the supply of raw water in the East Zone Concession Area," PCC said.
Currently, Manila Water and Pangilinan-led Maynilad Water Services Inc., which distributes water on the West Zone area in Metro Manila, are awaiting the outcome of contract reviews ordered by Duterte last year after his outburst against the water companies and their owners.
While Duterte had since apologized to Manuel V. Pangilinan and the Zobel brothers owning Ayala, Justice Secretary Menardo Guevarra had also clarified that reviews of the supposedly "onerous" water agreements will proceed as planned.
Before saying sorry to the businessmen last March, at the start of the pandemic, Duterte threatened to offer new contracts to the tycoons which if they reject, would supposedly force the government to nationalize the water distribution sector anew, similar to the early 1990s.