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Competition watchdog resumes M&A reviews

THE PHILIPPINE Competition Commission (PCC) has resumed its review of “potentially problematic” mergers and acquisitions (M&A) after a year-long suspension.

This comes as the effectivity of Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) expired on Wednesday (Sept. 15). Bayanihan II had suspended the PCC’s motu proprio review power on “non-notifiable” mergers and acquisitions for one year.

The law also raised the compulsory merger notification threshold to P50 billion for two years or until September 2022. This is much higher than the original P2.4-billion transaction size threshold and size of party threshold of P6 billion.

The lifting of the suspension and increased market monitoring efforts will allow the commission to flag potentially anti-competitive mergers and acquisitions, regardless of transaction value, PCC Chairperson Arsenio M. Balisacan said.

“We are hopeful that the return of PCC’s motu proprio review powers would discourage deals that are potentially anti-competitive. We continue to encourage firms to voluntarily notify the Commission to avoid the taxing possibility of unwinding their transactions after,” he said.

Just four transactions breached the P50-billion threshold since the effectivity of Bayanihan II, the PCC said. Some transactions were still reviewed under old thresholds during this period as they were completed before the law took effect.

Mergers and acquisitions notifications during the pandemic significantly declined. PCC received four so far in 2021, compared with 26 in 2020 and 46 in 2019.

“Keeping watch over M&As in the post-COVID-19 economic environment is critical to ensure that consolidation does not remain unchecked and is not allowed to lead to highly concentrated markets,” Mr. Balisacan said.

Grab Philippines’ acquisition of Uber’s domestic operations in 2018, for example, was reviewed even though the transaction did not meet the commission’s threshold for compulsory notification at that time. — Jenina P. Ibañez

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