PCC reminds UnionBank, Century Pacific on M&A deals

MANILA, Philippines — The Philippine Competition Commission (PCC) has reminded companies involved in recent merger and acquisition (M&A) deals to check if they meet the threshold for compulsory notification with the body.

The deals involve those between Union Bank of the Philippines and global banking giant Citi, Century Pacific Food Inc. (CNPF) and Ligo Sardines, and Shakey’s Pizza Asia Ventures Inc. and Potato Corner.

Krystal Uy, director of the Mergers and Acquisitions Office at the PCC, said the antitrust body has yet to receive the notification submissions of UnionBank to acquire Citibank’s consumer banking unit; CNPF to buy Ligo Sardines; and Shakey’s to purchase Potato Corner.

“Given the P50 billion thresholds qualification, the parties are encouraged to conduct due diligence to check if they meet the thresholds for compulsory notification, or to steer clear of any competition issues by undergoing voluntary notification in case they do not meet the thresholds,” she said.

Under the Bayanihan 2 Law which took effect in September last year, mergers and acquisitions with transaction values below P50 billion are exempt from the compulsory notification with PCC within two years from the effectivity of the law.

Before Bayanihan 2 came into effect, M&As that meet the P2.4-billion threshold for size of transaction and P6 billion for the size of party, are required to be notified with the PCC.

Last week, UnionBank announced it entered into a share and business transfer agreement for the acquisition of Citi’s local consumer banking business.

Meanwhile, CNPF, which is engaged in the production and export of marine products, said last week it signed a deal with the Tung family for the purchase of assets and intellectual property related to the manufacturing of the product lineup of Ligo, a leading brand in the sardine category.

Shakey’s also announced the acquisition of Potato Corner, a food kiosk brand known for its flavored fries.

Both CNPF and Shakey’s are owned by the Po family.

Amid the pandemic, Uy said the PCC is allowing the parties to file their notifications before consummation, waiving the usual notification period of 30 days upon signing of the definitive agreement.

While change of ownership of well-known brands means efficiency or expansion for former competitors into partners, she said such may also lead to consumers having fewer options and seeing changes in prices.

“As the antitrust authority, PCC’s merger reviews will ensure that the transactions do not lead to substantial lessening of competition in the relevant markets,” she said.