MANILA, Philippines (UPDATED) – The Philippine Competition Commission (PCC) rejected the initial transaction report of the Philippine Long Distance Telephone Company (PLDT) and Globe Telecom, Incorporated on their P69.1-billion deal to buy out the telecommunication business of San Miguel Corporation (SMC).
“We returned their submission because of incomplete information. We asked the parties to the transaction to refile their notification to PCC. The deal is not deemed approved,” PCC Chairman Arsenio Balisacan told Rappler in a mobile phone reply on Friday, June 10.
The anti-trust body’s decision comes a week after it released its implementing rules and regulations (IRR) for the Philippine Competition Act. (READ: San Miguel’s sale of telco business: Will consumers benefit?)
The PCC also clarified on Friday that the mere filing of a notification with the commission – even under transitory rules – does not guarantee that a transaction is “deemed approved.”
The San Miguel telco acquisition entails P52.08 billion for 100% equity interest in Vega Telecom, Incorporated and the assumption of around P17.02 billion of liabilities.
The deal would allow PLDT and Globe access to 700 megahertz (MHz) frequencies, which they said would help them provide subscribers with “better experience on mobile data and home broadband services.”
Under the deal, PLDT and Globe will be returning radio frequencies in 700 MHz, 850 MHz, 2500 MHz, and 3500 MHz bands to the government.
PLDT and Globe have also activated their first 700 MHz LTE cell sites.
Asked if the PCC’s decision means PLDT and Globe cannot proceed with the terms of the deal until their transaction report is approved, Balisacan replied in a text message: “Yes.”
PLDT, Globe: It was deemed approved
Despite the anti-trust body’s decision, PLDT and Globe firmed up their stance, saying the PCC has no power to undo their deal.
Globe said that the PCC’s claim that their notice’s “supposed deficiency in form and substance is not a ground to prevent the transaction from being deemed approved.”
“The only exception that a transaction is deemed approved is when a notice contains false material information. In this regard, the company stated that the notice does not contain any false information,” the Ayala-led telco told the Philippine Stock Exchange on Monday, June 13.
PLDT echoed Globe’s statement, saying that its co-acquisition of San Miguel’s telco assets was “deemed approved and cannot be subject to retroactive review by the Commission.”
San Miguel, meanwhile, said it acknowledges the jurisdiction of the PCC and expressed willingness to further explain its position.
San Miguel, PLDT, and Globe have submitted their response to the PCC’s request to add more information to their report.
“In the spirit of transparency and cooperation, the company submitted to the PCC copies of the relevant definitive agreements relating to the transaction,” SMC corporate information officer Ferdinand Constantino said. – Rappler.com