A UNIT of Ayala-led AC Energy Holdings, Inc. has secured approval from the competition watchdog on its plan to acquire a company with stakes in three biomass projects.
In a decision dated Nov. 16, the Philippine Competition Commission (PCC) said its mergers and acquisitions office had recommended the favorable decision for AC Energy subsidiary Presage Corp.
PCC said the acquisition by Presage of shares in Negros Island Biomass Holdings, Inc. (Islabio) “does not result in a substantial lessening of competition in the relevant market, since it does not appear that the merged firm has the ability and incentive to engage in foreclosure, post-acquisition, and sufficient post-acquisition competitive constraints on the merged firm remains from other market participants.”
Under Republic Act No. 10667, or the Philippine Competition Act, the antitrust regulator should be notified for every merger and acquisition deal whose value is above P1 billion before the transaction is consummated.
Islabio owns shares in three subsidiaries, namely: South Negros Biopower, Inc.; North Negros Biopower, Inc.; and San Carlos Biopower, Inc. The units are engaged in biomass power generation and the sale of electricity.
The deal involves the acquisition by Presage of the outstanding capital stock equivalent to 50,005 common shares of Islabio. Presage will gain control of Islabio and its operating subsidiaries, thus expanding AC Energy’s renewable energy portfolio to include biomass.
“The Commission hereby resolves that it will take no further action with respect to the Transaction,” PCC said in its decision.
The deal comes as AC Energy targets to develop by 2020 up to 2,000 megawatts (MW) of capacity, of which 1,000 MW is targeted to come from renewable energy. The company has installed 1,000 MW as of 2016 from a mix of energy resources. — Victor V. Saulon
