PCC cuts review period for merger proposals

By Elijah Felice Rosales, Business Mirror, Jun 19, 2019

THE country’s antitrust body has trimmed to 15 working days, from 30 calendar days, its review period for merger proposals in line with the government’s policy on ease of doing business (EODB).

In a commission resolution in May, the Philippine Competition Commission (PCC) hastened its review process for mergers that are less likely to substantially prevent, lessen or restrict competition in their relevant markets. The expedited review for merger proposals will take 15 working days under the first phase assessment.

Merging firms can apply for the faster review within 30 days after reaching a definitive agreement on the deal, but should be prior to any acts of consummation.

Qualified for the expedited review are transactions with no overlaps. There should be no actual or potential horizontal or vertical business relationship in the Philippines between the acquiring party and the acquired entity, as well as the entities under it.

Also eligible to apply for the faster review are global transactions where the acquiring and acquired parties are foreign firms and their subsidiaries in the country act as mere manufacturers or assemblers.

However, the local subsidiary should export 95 percent of its products to its foreign parents, affiliates or third parties that are operating outside of the Philippines. Also, the remaining 5 percent of products sold locally must be minimal in relation to the entirety of its relevant market.

Moreover, if the merging parties are doing business globally and their presence in the country is negligible, then they, too, are qualified for the expedited review.

Further, joint ventures for real-estate projects can also seek a quicker assessment of their transaction. However, the joint venture—incorporated or not—must be formed purely for the purpose of construction and development of a residential or commercial real-estate project.

PCC Chairman Arsenio M. Balisacan said in a statement on Tuesday the competition body intends to create a conducive regulatory environment for businesses with its move to trim the review period for mergers.

“The PCC recognizes that a strong and vibrant economy stimulates firms’ appetite for business consolidation, corporate takeovers and market expansion. The expedited merger review is a testament of the PCC’s commitment to be efficient in the review of transactions deemed less likely to pose competition concerns,” Balisacan explained.

“The expedited merger review demonstrates the PCC’s commitment in enabling a conducive regulatory environment for doing business while implementing its legal mandate of guarding against transactions that may substantially lessen competition in the market,” he added.

State agencies are reducing processing time for applications of permits and licenses, as well as for transactions, in line with the EODB law’s objective of cutting red tape. The law standardized completion time for simple transactions at three working days; complex transactions at seven working days; and highly technical transactions at 20 working days.