PCC approves merger of Dennis Uy's Udenna with 2GO shareholder
MANILA, Philippines – The Philippine Competition Commission (PCC), the country's antitrust agency, approved Udenna Corporation's merger with a Dutch company that indirectly holds a stake in 2GO Incorporated's parent firm, after it complied with the commission's demands.
KGL Investment BV (KGLI-BV) is a private limited liability company under KGL Investment Coöperatief UA, based in the Netherlands.
The PCC previously nullified Udenna's purchase of the entire outstanding capital stock of KGLI-BV and imposed a P19.6-million fine as the deal was finalized without clearance from the commission.
Back in August 2016, Udenna bought all of KGL Investment Coöperatief UA's shares in KGLI-BV, which in turn owned 39.71% of KGLI-NM Holdings Incorporated.
KGLI-NM Holdings is a Filipino firm that owns about 60% of 2GO parent firm Negros Navigation Company Incorporated. (READ: How SM Investments acquired stake in 2GO)
Udenna and KGLI-BV filed their notification on March 23 and entered PCC review on April 5. The firms also paid the fine on April 19 at the National Treasury as part of the compliance order, said the PCC.
"While we reiterated that we acted in good faith in consummating the transaction based on our interpretation of the then newly issued rules, we respected the decision and submitted to the process of having the transaction approved," Adel Tamano, vice president for corporate affairs at Udenna, said in a statement.
After the firms' compliance, the PCC wrote in its decision that Udenna's acquisition of the outstanding stock of KGLI-BV "is not likely to result in lessening of competition within the Philippine market," as there are no existing overlaps between the parties.
"We are grateful to the commission for their speedy and decisive action on this matter. The decision of the PCC affirms our intention of offering better transport solutions to Filipino consumers by making our operations more reliable and efficient," Tamano said.
Under Republic Act (RA) No. 10667 – also known as the Philippine Competition Act (PCA) – the antitrust regulator should be notified for merger and acquisition deals with transaction values above P2 billion, before the transaction is sealed.
Section 17 of the PCA states that parties who fail to notify the PCC of a transaction that meets the threshold would face "a fine ranging from 1% to 5% of the transaction value" and their business deal would be "voided." (READ: How the Sy family and Dennis Uy became business partners)
Udenna is a domestic holding company whose subsidiaries are engaged in the distribution and retailing of petroleum products, commercial shipping, ship management, logistics, financial services, environmental services, as well as property development. – Rappler.com