PCC review not needed for SMC acquisition of Eagle Cement
San Miguel Corporation can now push through with its P97.5 billion acquisition of 88.5 percent of Eagle Cement Corporation after the Philippine Competition Commission (PCC) has ruled that its approval is no longer required for the transaction.
In a disclosure to the Philippine Stock Exchange, SMC said the PCC has issued a notice stating that, “While the Proposed Transaction breaches the thresholds prescribed by the Philippine Competition Act (PCA) and its Implementing Rules and Regulations (IRR), the Commission has ruled that based on the documents and information submitted with the Form, the Proposed Transaction is not subject to the notification requirement under the IRR.”
In a separate disclosure, Eagle Cement said its controlling stockholder Far East Holdings, Inc., owned by SMC President and CEO Ramon S. Ang will now be withdrawing its notification with the PCC in connection with the transaction because of the PCC notice.
SMC Chief Information Officer Ferdinand Constantino explained that, “With the issuance of the aforementioned Notice, the Transaction shall not be subject to review by the PCC based on the IRR of the PCA.”
“We further advise that as a consequence of the PCC Notice, the Transaction may proceed subject to the completion of the mandatory tender offer by San Miguel Equity Investments Inc., as purchaser, for the acquisition of 11.5 percent equity interest in ECC held by its minority shareholders, as required under the relevant provisions of the Securities Regulation Code,” he added.
Eagle Cement is planning to voluntarily delist from the PSE if San Miguel Equity Investments is able to acquire an additional 1.5 percent of the company.
The cement firm said its Board of Directors resolved to cooperate with SMC subsidiary SMEI and fully support its tender offer for 11.5 percent of the cement firm worth P12.66 billion.
Eagle said a share purchase agreement has already been signed between SMEI and Eagle Cement’s majority shareholders led by Ang.
This consists of 4.43 billion shares from Ang’s Far East Holdings Inc. as well share held personally by Ang, his son and SMC Director John Paul L. Ang, and daughter and SMC authorized signatory Monica L. Ang at P22.02 per share.
Once the tender offer is completed and SMEI is able to acquire more than 90 percent of the total outstanding capital stock of Eagle, the firm said it will seek the approval of its shareholders to apply for the voluntary delisting of its shares.
SMEI’s acquisition of more than 90 percent of Eagle will mean that the cement firm is no longer compliant with the PSE’s minimum public ownership rule although Eagle has the option to sell more shares to the public to dilute SMC’s stake.
SMC said earlier that intends to file a request for exemptive relief with the Securities and Exchange Commission to allow the tender offer to start after the approval by the PCC.