The Philippine Competition Commission said Friday it began the implementation of provisional thresholds for compulsory notification of mergers and acquisitions.
It said mergers and acquisitions worth P6.1 billion as size of party and P2.5 billion as a size of transaction must be notified to the commission for mandatory merger review.
SoP refers to the aggregate value of assets or revenues in the Philippines of the ultimate parent entity of one of the parties to a transaction, while SoT refers to the value of assets or revenues of the acquired entity and the entities it controls.
The anti-monopoly body said if mergers and acquisitions meet the thresholds for compulsory notification, the transactions should be subject to review before they could be consummated.
It said the new thresholds would remain effective until the approval of the commission en banc of new thresholds for compulsory notification.
It said that since the two-year temporary thresholds of P50 billion for SoP and SoT under the Bayanihan to Recover as One Act (Bayanihan 2) were set to expire on Sept. 15, 2022, the PCC updated the 2020 thresholds based on the country’s nominal gross domestic product growth in the past two years.
Parties seeking confirmation that they are not subject to compulsory notification under the previous P50-billion thresholds should submit definitive agreements signed before Sept. 16, 2022 with their letter of non-coverage to the PCC’s Mergers and Acquisitions Office.
Under the two-year effectivity of the thresholds under Bayanihan 2, the PCC received notifications of nine transactions, six of which were approved and three withdrawn.
The PCC also processed 55 LNCs for transactions that did not breach the Bayanihan 2-prescribed thresholds, involved internal restructuring or consolidation of ownership without change in control and referred to the acquisition of lands.
Before the legislative intervention, the thresholds in 2020 were P6 billion for SoP and P2.4 billion for SoT. Originally set at P1 billion in 2015 under the Philippine Competition Act, the initial merger thresholds were subject to adjustment under PCC Memorandum Circular 2018-001.
This ensures that the notification thresholds account for inflation and the country’s overall economic performance.
The PCC received a total of 227 notifications and approved 205 transactions with a combined value of P4.63 trillion. It has blocked one harmful transaction and conditionally approved two transactions on account of the parties’ commitments to address competition concerns.
