THE Philippine Competition Commission (PCC) has approved US-based Johnsonville International, LLC’s acquisition of a majority stake in local hotdog maker Frabelle Corp.
In a Commission decision approved on May 7, the country’s antitrust body said Johnsonville’s purchase of 51% of the issued and outstanding capital stock in Frabelle does not lead to substantial lessening of competition in the domestic market.
Johnsonville, the acquiring entity, is a US company engaged in the manufacturing, packaging, and distribution of fresh, chilled, and frozen meat products. It distributes sausages in the Philippines.
Frabelle, on the other hand, is a homegrown firm engaged in the manufacturing, packaging, and distribution of fresh, chilled and frozen processed meat products, including hotdogs and sausages under the brand name “Frabelle.”
PCC found that Frabelle’s production volume for sausages is “negligible” in the local market, that even if it is combined with Johnsonville’s production volume it is unlikely to significantly affect the market structure.
It also noted that the deal also has a minimal effect on the local market for hotdogs and sausages.
“As both firms also deal with cold storage warehousing, the transaction was found to have no ability or incentive to engage in input or customer foreclosure in the market for cold storage in the Caloocan, Malabon, Navotas, and Valenzuela area,” the PCC said in a Tuesday statement.
The PCC, the country’s anti-trust body, is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not harm the interest of consumers.
To date, PCC has received 182 merger transactions by local and international companies. Of this, 169 were approved while one has been blocked. — Janina C. Lim