The Philippine Competition Commission (PCC) has cleared the proposed joint venture between the subsidiaries of Mitsui & Co., Ltd. (Mitsui) for its business process outsourcing unit and KDDI Corporation (KDDI), an ICT solutions provider.
In a statement released Monday, April 29, the PCC said that it greenlighted the joint venture on April 13, 2023. After thorough assessment, it found that the transaction between Mitsui subsidiary Relia, Inc. and KDDI subsidiary KDDI Evolva will not likely to result in a substantial lessening, restriction, or prevention of competition in the relevant market.
The proposed joint venture between Mitsui and KDDI involves merging their subsidiaries Relia and KDDI Evolva, respectively. KDDI Evolva will be the surviving entity, which is aligned with Mitsui’s strategy to transform Relia into its wholly-owned subsidiary.
Mitsui’s Relia specializes in business process outsourcing services, while KDDI is in the business of offering ICT solutions. The joint venture aims to combine Mitsui’s strategic capabilities with KDDI’s telecommunications expertise, focusing on digital solutions and innovation in areas such as contact center services and IT solutions through KDDI Evolva, the resulting entity.
In its statement, PCC said that key considerations in the Commission Decision include:
Competitive Constraints: There is significant competitive pressure from numerous competitors in the market.
Customer Options: Customers still have the option to switch to other competitors that can provide the same or similar services.
Market Entry and Expansion: There are low barriers to entry for new businesses seeking to enter the market, as well as low barriers to expansion for existing ones that plan to expand their business.
Further, the Commission identified the provision of Secure Access Service Edge (SASE) for integrated network solutions on a global scale as the relevant market being assessed in the transaction. As a modern way of keeping networks safe and connected, it uses security tools like firewalls and networking technology to let people access applications and data securely from anywhere on any device. The Commission noted that while there is a vertical relationship between the parties involving the resale of SASE licenses, this relationship does not significantly impact competition due to the presence of alternative providers and services in the market.
As mandated by the Philippine Competition Act, the PCC is committed to fostering a competitive business environment by ensuring that mergers and acquisitions contribute to efficient markets and consumer welfare.