THE Philippine Competition Commission (PCC) has approved East West Banking Corp.’s purchase of the car-loan portfolio of the Philippine Bank of Communications (PBCom).
With the approval, EastWest can go on with its acquisition of a portion of PBCom’s car-loan receivables, specifically limited to dealership generated accounts. The transaction, the PCC said in a commission decision on Tuesday, is subject to EastWest’s acceptance, and after due diligence and evaluation of relevant documentation.
In endorsing the transaction, the PCC argued the merger will not likely result in the substantial lessening of competition in the car-loan market.
The PCC said the acquisition will not even lead to any significant change in market structure. After the transaction, there is sufficient competitive challenge from other banks that offer similar loans and leases, it added.
PBCom is one of the country’s largest commercial banks offering various financial services, including deposit products, Treasury and foreign-exchange trading, trade services, cash management services, credit and loan facilities, trust and investment management, as well as ancillary services.
EastWest is a subsidiary of listed Filinvest Development Corp., the holding firm of the Filinvest Group. It is doing retail banking, consumer lending, corporate banking, rural banking and Treasury and trust management.
The EastWest-PBCom acquisition was the second approved of its kind by the competition body in a span of five days.
The PCC last week gave JACCS Co. Ltd. the green light to carry on with its acquisition of shares in the financing arm of Mitsubishi Motors Philippines Corp. (MMPC). The transaction will result in JACCS acquiring shares in MMPC Auto Financial Services Corp. (Mafs).
Under the agreement, JACCS is set to acquire BDO Leasing and Finance Inc.’s 3,000,000 common shares and MMPC’s 375,000 common shares in Mafs for P165.63 million and P20.7 million, respectively.
Similar to its findings on the EastWest-PBCom transaction, the PCC argued the Mafs buyout will not lead to a substantial lessening of competition in the car-loan market. It added the merger could even tighten the car-loan competition, as BDO Leasing and Finance offers loans to automobile brands other than Mitsubishi.
The PCC is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure these deals will not harm the interest of consumers.
As of June, it received 184 merger proposals from local and international firms with a transaction value of P2.87 trillion, of which 174 were approved and one was blocked. Industries with most merger and acquisitions were manufacturing with 42 transactions; finance and insurance with 30; real estate with 24; electricity and gas, also with 24; and transportation and storage with 13.