THE PHILIPPINE Competition Commission (PCC) said it has started an in-depth review of Ayala Healthcare Holdings, Inc.’s (AC Health) proposed acquisition of a 49% stake in St. Joseph Drug.

The competition watchdog was notified on Jan. 13 regarding the proposed transaction between AC Health’s pharmaceutical arm, AHCHI Pharma Ventures, Inc. (APV) and St. Joseph Drug operator Joleco Resources, Inc., the PCC said in a statement on Tuesday.

APV seeks to acquire a substantial stake in Joleco Resources. The two companies signed definitive agreements for the transaction on Dec. 15 last year.

Under its Phase 1 review, the PCC-Mergers and Acquisitions (M&A) office pointed to possible competition concerns in the retail sale of pharmaceutical and non-pharmaceutical items across 28 localities in Ilocos Region and Cordillera Administrative Region.

With this, the PCC’s M&A office recommended the opening of a Phase 2 review that requires a more detailed and extensive assessment on whether the transaction may lead to a substantial lessening of competition in the relevant markets.

The PCC is tasked to review M&As to ensure that the deals “will not substantially lessen competition in the relevant markets and harm consumer welfare” under Republic Act No. 10667 or the Philippine Competition Act.

APV operates the Generika Drugstore. It is also engaged in the pharmaceutical importation and distribution via Medica and MedEthix.

AC Health is the healthcare subsidiary of Ayala Corp. Its portfolio consists of the pharmacy chain Generika Drugstore, pharmaceutical importer and distributor Medica and MedEthix, multi-specialty clinics, ambula-tory centers and full-service hospital network Healthway, and healthcare aggregator app KonsultaMD.

Established in 1958, St. Joseph Drug has more than 112 stores in North Luzon.

On Tuesday, Ayala Corp. shares were unchanged at P581 apiece. — Revin Mikhael D. Ochave