PHILIPPINE Competition Commission has approved AXA S.A.’s acquisition of XL Group Ltd. but imposed a fine on the insurance firms for the late filing of their notification of the merger.
In a Tuesday statement, the anti-trust body said its Mergers & Acquisitions Office found that the transaction “is not likely to result in a substantial lessening of competition.”
AXA handles life insurances while the XL Group offers non-life insurance products.
AXA is the holding firm of the AXA Group which is a major insurance and asset management firm in Europe, the US, Middle East, Latin America and Asia, including the Philippines where it operates through Philippine AXA Life Insurance Corp., among other units.
Meanwhile, XL Group is a global insurance company headquartered in Bermuda. It provides casualty, property and specialty products to enterprises in North America, London, Asia Pacific and Bermuda.
With their global operations, AXA and XL will be required to submit to 11 different competition authorities aside from the PCC.
Approved by the PCC on Aug. 16, AXA, through its subsidiary Camelot Holdings Ltd., will merge with XL Group, with the latter to be a wholly-owned subsidiary of AXA.
However, the firms’ notification to the PCC on June 25 was considered late. This spans 112 days after the March 25 signing of the transaction deal and beyond the 30-day notification period prescribed by the PCC’s rules.
This subjected AXA-XL Group deal to a P123,861.86 fine or half of 1% of 1% of the value of transaction, as provided by the PCC’s terms.
The PCC said the merger “is the first case to be fined for late filing of the compulsory notification.”
“We urge firms to observe a standard of diligence in complying with notification requirements across countries whether large or small. Merging parties that file after the notification period, even prior to consummation of the deal, will be fined,” said Chairman Arsenio M. Balisacan in the statement.
The agency added that it conducts pre-notification consultations with merging parties to help them on the timing of notifications and other necessary information such as guidance on thresholds and identified markets covered by the firms.
The PCC has received notice of 154 transactions, including 44 global mergers. Of this total, 143 have been approved.
The country’s anti-trust body is mandated under the Philippine Competition Act of 2015 to review mergers and acquisitions to ensure that each do not reduce competition in the local market. — JCL