By Denise A. Valdez

SAN MIGUEL Corp. (SMC) is terminating its $2.15-billion acquisition of Holcim Philippines, Inc. after failing to obtain clearance from the Philippine Competition Commission (PCC).

In a statement on Monday, the diversified conglomerate said it would “no longer proceed” in buying 85.73% shares in Holcim after its agreement lapsed on May 10 without getting the required approval of the PCC.

With the discontinuation of the proposed acquisition, SMC said the supposed tender offer of Holcim shares held by minority shareholders is likewise withdrawn.

SMC, through First Stronghold Cement Industries, Inc. (FSCII) — a unit of SMC subsidiary San Miguel Equity Investments, Inc. — was buying 5.53 billion common shares in Holcim, the local arm of Switzerland-based LafargeHolcim Ltd.

The deal was made on May 10, 2019 with the purpose of expanding SMC’s foothold in the country’s cement industry.

As part of the transaction, FSCII was supposed to do a tender offer of shares in Holcim held by minority investors equivalent to 14.27% of its total issued and outstanding capital stock.

While the Department of Trade and Industry earlier said the buyout might result in lower prices of locally produced cement, the PCC said it might substantially lessen competition in the grey cement market in Luzon.

It flagged that FSCII is under SMC, and SMC is under Top Frontier Investment Holdings, Inc., which has two cement plants set to open in the next two years: Northern Cement Corp. and Oro Cemento Industries Corp.

The PCC likewise noted that SMC President and Chief Operating Officer Ramon S. Ang is the majority owner and chairman of Eagle Cement Corp.

“Sellers, distributors, and hardware owners in the relevant markets viewed Eagle Cement and Northern Cement as ‘sister companies’ and part of the Top Frontier group,” the competition watchdog said in January.

Shares in SMC at the stock exchange gained 50 centavos or 0.52% to P97 each on Monday, while shares in Holcim lost P2.55 or 22.57% to P8.75 each.