By Bernie Cahiles-Magkilat
San Miguel Corp. (SMC) and Holcim Philippines, Inc. (HPI) have notified the Philippine Competition Commission (PCC) on the acquisition deal, which qualify for the agency’s mandatory review.
Chairman Arsenio M. Balisacan. (https://phcc.gov.ph)
In a statement, PCC Chairman Arsenio M. Balisacan said they received SMC and HPI’s notification Thursday, June 6.
The PCC's Mergers & Acquisitions Office is currently evaluating the suffiency of the parties' submissions. Once found sufficient, the Phase 1 merger review of the transaction will proceed, said Balisacan.
The PCC is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that they will not result in substantial lessening of competition in the relevant market and harm the interest of consumers.
Merging firms that meet the notification thresholds to notify the Commission of their transaction within 30 days from signing of their definitive agreement. Signing of the definitive agreement between the two parties was announced in the media on May 9.
With the PCA and the rules of merger procedure in place, every M&A notification will be evaluated by PCC in a fair and transparent manner. If there is nothing anticompetitive in a transaction, then PCC would approve it in a timely manner. If competition issues arise, the law allows for possible remedies to address the concerns.
SMC through its wholly-owned subsidiary First Stronghold Cement Industries, Inc. acquired 85.7 percent of Holcim for $215 billion.
Holcim Philippines said the agreement was executed by Holderfin B.V., First Stronghold, SMC and Lafargeholcim Ltd.
Under the agreement, Holderfin will sell its shares in Holcim Philippines and shall buy Cemco Holdings, Inc. and Union Cement Holdings Corporation to also sell their shares to First Stronghold, which is a wholly owned subsidiary of San Miguel Equity Investments, Inc. which, in turn, is a wholly owned subsidiary of SMC.
Union Cement owns 3.91 billion Holcim shares equivalent to a 60.55 percent stake, Holderfin has 1.17 billion or 18.11 percent, and Cemco Holdings has 456.69 million or 7.08 percent.
Switzerland-based LafargeHolcim said it will use the proceeds from the sale to further improve its debt ratio by about 0.3 times. The agreement with San Miguel is expected to close in the fourth quarter.
In November last year, LafargeHolcim sold its entire shareholding of 80.6 percent in Holcim Indonesia to Semen Indonesia for an enterprise value of $1.75 billion as it sought to divest from the region to reduce debt.