Faster review of some M&As allowed

By Janina C. Lim
Reporter

THE PHILIPPINE Competition Commission (PCC) is allowing faster review of certain merger and acquisition (M&A) deals that are “less likely to substantially prevent, lessen, or restrict competition” in the market.

The antitrust body on Tuesday said it issued the resolution covering the rules for the expedited merger review process, which would cut the Phase 1 assessment process for qualified transactions to 15 working days from the 30 calendar days recommended by the Philippine Competition Act.

The new rules will take effect on July 2.

The PCC identified several transactions that may qualify for the faster review process, such as those that have no overlaps, global transactions, and joint ventures for real estate projects.

For instance, the PCC may hasten the review of global mergers wherein the acquiring or acquired companies are foreign entities whose Philippine subsidiaries are merely manufacturers or assemblers of products exported abroad.

Another type of deal that may qualify for the expedited review is a global transaction wherein the acquiring and acquired entities have “negligible or limited presence” in the Philippines.

Joint ventures created for the development of residential and commercial real estate projects may also be eligible for the accelerated review process.

In a separate text message, PCC Chair Arsenio M. Balisacan said the Commission’s three years of experience in reviewing mergers and acquisitions showed that these are the types of transactions less likely to pose competition concerns.

“As such, efficiency dictates we dispose them quickly for the benefit of the parties and also for PCC’s use of resources,” Mr. Balisacan said.

The competition watchdog said the new rules were crafted in response to the passage last year of Republic Act No. 11032 or the Ease of Doing Business (EODB) Act of 2018, which mandates all government agencies to work on a uniform turnaround time of three, seven and 20 days respectively for simple, complex and highly technical transactions.

While the EODB law’s implementing rules and regulations have yet to be issued, the government has been encouraging agencies to implement the rules and the public to report violations of the law.

Agencies with quasi-judicial functions earlier raised concerns on implementing the law which was initially meant merely for the releasing of certain business permits or certificates released over frontline transactions.

“The PCC recognizes that a strong and vibrant economy stimulates firms’ appetite for business consolidation, corporate takeovers, and market expansion. The expedited merger review is a testament of PCC’s commitment to be efficient in the review of transactions deemed less likely to pose competition concerns,” Mr. Balisacan was quoted as saying in the statement.

“Every merger review employs different levels of technical expertise and resources. The expedited review of mergers that are less likely to pose competition issues will lead to more efficient use of Commission resources towards the implementation of a holistic merger control regime,” he added.

The PCC noted that the regular 30-calendar day period for merger review is among the shortest review periods in the world.

The watchdog added it offers free pre-notification consultation to parties, including if transactions may qualify for the expedited process.

To date, the PCC has received 184 notifications. Of this total, 174 were approved and one was blocked, totalling P2.87 trillion in accumulated transaction value.

The top five most active sectors for mergers and acquisitions are manufacturing; finance and insurance; real estate; electricity and gas; and transportation and storage.