THE Philippine Competition Commission (PCC) announced on Thursday that it approved two joint ventures (JV), one involving Ayala Land Inc. and Royal Asia Land Inc., and another between Markham Resources Corp. and Alternergy Mini Hydro Holdings Corp.
The PCC said it found both transactions to not result in substantial lessening of competition in their respective relevant markets.
The first transaction involved publicly listed Ayala Land and Royal Asia Land Inc., which are setting up a JV to acquire, own and develop a property in Cavite. The JV relates to a 936-hectare mixed-use project with commercial and residential components in Silang and Carmona, Cavite.
Royal Asia Land was incorporated to purchase, acquire, own, lease, sell and convey real properties and whose ultimate parent entity is PCO South Frontier Holdings Inc.
Both firms intend to subscribe to shares of the JV company, with each party owning half of the outstanding stock of the company.
Royal Asia Land will receive a consultation fee of 2 percent of the company’s gross revenue for its participation in the planning and development of the property. Ayala Land, the property’s project and development and sales and marketing manager, will receive a development-management fee of 12 percent and sales and marketing fee of 5 percent of the company’s gross revenues.
“The transaction does not result in the substantial lessening of competition because it will not have a structural effect on the market,” the antitrust body said in its decision on February 20.
The second transaction involving Markham Resources and Alternergy is a JV investment in Kiangan Mini Hydro Corp., Ibulao Mini Hydro Corp. and Lamut-Asipulo Mini Hydro Corp.
The firms will be known as the Markham-Alterenergy, a special-purpose company formed to operate, develop and maintain run-of-river mini hydro projects along the stretch of the Asin, Ibulao, Hungduan, Lamut and Panubtuban Rivers in the Ifugao province.
Markham is a local company engaged in the development, construction, lease and operation of electricity-generation and -distribution and hydropower plants, while Alternergy is a holding company engaged in the sale, assignment, transfer, mortgage, pledge, exchange or other disposition of real and personal property of every kind and description.
The PCC said it found there are enough competitive constraints by other players in the relevant market and found no increased ability or incentive for the new joint venture to engage in foreclosure in the relevant market after the transaction.
“The transaction also does not appear to create or strengthen the ability or incentive of the merged firm to engage in withholding capacity,” the PCC said.
The PCC reviews mergers and acquisitions that reach the P1-billion threshold.