A Norwegian energy firm that has just entered the Philippine market has secured clearance from the Philippine Competition Commission (PCC) to acquire a firm engaged in the generation of green power.
The PCC last week approved the acquisition by Scatec Solar ASA of 100 percent shares in SN Power AS maintained by the Norwegian Investment Fund for Developing Countries (Norfund). In authorizing the buyout, the agency concluded competition in the renewable energy generation and power supply markets will be sustained in spite of the transaction.
The PCC said there is no horizontal or vertical relationship between the acquiring party and the acquired firm, including the entities they operate.
With the PCC clearance, Scatec Solar and SN Power can now execute their transaction valued at $1.16 billion. As for the antitrust regulator, the buyout marked its first approved acquisition for the year, and in compliance with the new threshold of P50 billion, about $1 billion, set under the second Bayanihan to Recover As One Act.
Prior to the acquisition, Scatec Solar maintained zero operations in the Philippines, but is involved in developing, building and running renewable energy power plants around the world.
Based in Oslo, it is respected for its investments in green energy firms in developing markets. In October it decided to purchase SN Power as part of its goal to improve capacity to 1.9 gigawatts across four continents by this year.
SN Power develops, puts up and operates hydropower plants in Asia, Africa and Latin America.
Norfund, who owns SN Power before Scatec bought it, is tasked by the Norwegian government to support sustainable ventures in developing economies by granting equity capital or extending loans and guarantees. In the Philippines, SN Power manages at least a dozen power plants.
SN Power is present in the Manila-Oslo Renewable Enterprise Inc., as well as in SNAP entities, namely in, SN Aboitiz Power-Magat Inc.; SNAP-Projects Inc.; SNAP-Benguet Inc.; SNAP-Hydro Inc.; SNAP-Renewables Inc.; Snap-RES Inc.; SNAP-Ifugao Inc.; SNAP-Greenfield Inc.; SNAP-Generation Inc.; SNAP-Cordillera Inc.; SNAP-Energy Inc.; and Neptune Hydro Inc.
Even though SNAP firms are operated through a joint venture with Aboitiz Renewables Inc., the shares bought by Scatec Solar only cover those of SN Power. As such, SN Power’s interests in Norfund will be replaced by Scatec, the PCC made clear.
Likewise, Scatec will accumulate 100 percent of the Norfund shares in SN Power, rendering the financier to quit all of its business interests in the Philippines.
The PCC disclosed the Scatec Solar-SN Power transaction was the 208th it approved in terms of mergers and acquisitions. The agency is required under the competition law to evaluate how buyouts will affect the competition in their respective markets.