Razon firm takeover of Manila Water OKs

MANILA, Philippines — The Philippine Competition Commission (PCC) has cleared the acquisition by businessman Enrique Razon’s Trident Water Holdings Co. Inc. of a controlling stake in Manila Water Co. Inc.

PCC said the deal would not lead to reduced competition in the market.

“This is because there exists no horizontal overlap between the parties and 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.

Based on the findings, the PCC said no further action would be taken on the proposed transaction.

Under the transaction, Trident Water is acquiring 51 percent voting interest through subscription of 820 million common shares of stock from the unissued authorized capital stock of Manila Water.

In addition, Manila Water’s subsidiary, Philwater Holdings Co. Inc., would grant proxy in favor of Trident Water over the seller’s preferred shares.

Trident Water is a subsidiary of Prime Metroline Holdings Inc. which is engaged in hotel and gaming operations, mining, infrastructure, power generation and distribution, and port services.

Manila Water, meanwhile, is a publicly listed unit of the Ayala Group, holding the exclusive right to provide water services, particularly water treatment, water distribution, sewerage and sanitation services, to the eastern zone of Metro Manila via a concession agreement with the Metropolitan Waterworks and Sewerage System.

Razon’s entry into Manila Water is seen as strategic for the Ayala Group amid political challenges, as the investor has good relations with the administration.

The concession contract of Manila Water, as well as that of Maynilad Water Services Inc. are under government review over alleged onerous provisions.

PCC reviews mergers and transactions to ensure deals do not harm consumer interest and restrict competition.