The Philippine Competition Commission (PCC) has decided to extend the review of Universal Robina Corp.’s (URC) proposed acquisition of Roxas Holding Inc.’s milling and land assets in Batangas that may affect competition in the sugar industry.
In a two-page decision, the PCC said its Mergers and Acquisitions Office (MAO) on August 7 resolved to move to second phase review the transaction between URC, Roxas Holdings and Central Azucarera Don Pedro Inc. With this, the acquisition will have to wait for another 60 days beginning August 7, in accordance to Section 17 of the Philippine Competition Act (PCA).
“The initial market investigation conducted by MAO indicates that the transaction may affect the sugar industry, particularly the markets for the provision of sugar cane milling and refining services, and the production, distribution and sale of raw sugar, refined sugar and molasses. In accordance with [the PCA] and its implementing rules, MAO has a period of 60 days from August 7 within which to conduct the phase two review of the transaction,” the decision read.
The commencement to a phase two review, however, does not necessarily mean MAO finds the merger anticompetitive, or it has prejudged the result of the review. “This merely signifies that the transaction requires a more detailed analysis based on further information requested from the notifying parties and other such information as may be necessary to complete the review,” the decision added.
URC wants to acquire the milling and refining assets of Central Azucarera Don Pedro and land owned by Roxas Holdings, on which the milling and refining assets are situated.
The food conglomerate will acquire all buildings, improvements, machineries and equipment, laboratory equipment, spare parts and transportation equipment, as well as the land on which the following assets are situated. The acquisition also includes assets necessary for the continuing operations of the refinery and milling plant in Nasugbu, Batangas.
URC is operating six sugar cane mills located in Iloilo, Negros Oriental, Negros Occidental, Cagayan and Batangas. Its sugar division manufactures raw sugar, refined sugar and molasses for supply of its food operations.
Roxas Holdings, on the other hand, owns 100 percent of shares of Central Azucarera Don Pedro, which operates a massive sugar cane milling and refining plant in Nasugbu, Batangas. It is also in the business of trading raw and refined sugar, as well as molasses.
The second phase review will look into the effects of the transaction on competition in the provision of sugar cane milling in Batangas, Cavite, Laguna and Quezon and in the provision of raw sugar refining services. It will also probe if market competition on raw sugar, refined sugar and molasses will lessen should the parties carry on with the acquisition.