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M&A review period shortened

June 19, 2019

PCC: Move to foster ‘conducive’ environment for doing business in the country

THE review period for qualified mergers and acquisitions (M&A) would now last 15 working days in line with the government’s efforts to make doing business in the country easier, the Philippine Competition Commission (PCC) announced on Tuesday.

In a statement, the state-run competition watchdog said the review process was cut from the 30 calendar days currently imposed under what it called “the regular Phase 1 merger assessment.”

This will take effect on July 2, or 15 days after the resolution on the shortened period is published.

The PCC said “merging parties may apply for the expedited review within 30 days after signing the definitive agreement on the deal, but prior to any act of consummation.”

Qualified M&A, it added, are those that are “are less likely to substantially prevent, lessen or restrict competition in their relevant markets.”

The merging parties should have no actual or potential horizontal or vertical business relationship, according to the antitrust watchdog.

The mergers and acquisitions that may undergo a shortened review are the following:

Both the buying and acquired parties are foreign entities whose local subsidiaries serve as manufacturers or assemblers of products. At least 95 percent of these products should be for export, and the rest should be sold locally.

The parties have a “negligible or limited presence” in the country.

Joint ventures established for the purpose of building and developing residential or commercial real-estate projects.

The PCC pointed out, however, that the 30-calendar day period was among the fastest worldwide.

It said it was offering free pre-notification consultation to merging parties, including those that could qualify for an expedited process.

“The PCC recognizes that a strong and vibrant economy stimulates firms’ appetite for business consolidation, corporate takeovers and market expansion,” PCC Chairman Arsenio Balisacan said.

“The expedited merger review demonstrates [the] PCC’s commitment in enabling a conducive regulatory environment for doing business while implementing its legal mandate of guarding against transactions that may substantially lessen competition in the market,” he added.

A quasijudicial body established in 2016 under Republic Act 10667 or the Philippine Competition Act of 2015, the PCC is tasked with reviewing mergers and acquisitions for possible adverse effects on competition and also investigating anticompetitive practices.

PCC has received 184 transaction notifications to date. Of this number, 174 have been approved and one has been blocked. Total transaction value is P2.87 trillion.

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