MANILA, Philippines — Antitrust regulators have given their go-signal to Gokongwei-led snack maker Universal Robina Corp.’s bid to acquire several sugar milling and bio-ethanol distillery plants in Negros.
In a decision dated September 3, the Philippine Competition Commission (PCC) cleared Universal Robina’s proposed acquisition of assets in Central Azucarera de la Carlota Inc. (CA-Carlota) and Roxol Bioenergy Corp. (Roxol), both wholly-owned subsidiaries of listed sugar and bioethanol producer Roxas Holdings Inc.
Universal Robina also wants to purchase Roxas Holdings’ shares in Najalin Agri-ventures Inc.
As the country’s top snack maker cornering about a quarter of local market’s chocolates, candies and snack segments, Universal Robina relies heavily on sugar as a top raw ingredient for its products. Acquiring sugar millers, in turn, lower company costs.
On Monday, shares in Universal Robina inched up 0.79% to close at P140 apiece, while that in Roxas Holdings surged by a higher 12.79% to end the trading day at P1.94 each.
The PCC’s nod came a year after a similar transaction by the same parties was blocked by regulators in Batangas. In that transaction, Universal Robina attempted to take Central Azucarera Don Pedro Inc. (CADPI), another Roxas Holdings subsidiary, but regulators said doing so would result into a monopoly in the area.
“Unlike in the Batangas deal where sugar planters had to choose between two players and would have lost the benefit of competition in their merger, majority of Negros sugarcane farmers work in associations with bargaining power,” PCC said.
“Planters are able to switch to get the best price for their produce and competing millers in the area respond accordingly in price and incentives to draw in the farmers’ haul and deal,” it added.
Once the transaction is completed, Universal Robina will own all buildings, plants and other assets of CA-Carlota and Roxol. The company will also take 520,115 Najilin common shares held by RHI and its nominee shareholders.
PCC reviews large mergers and acquisitions that are likely to pose risks to market competition when unchecked, an environment that regulators believe benefits consumers through lower prices and better services.