THE country’s antitrust regulator has approved the merger of AXA SA and the XL Group Ltd., but has also imposed a fine on the amalgamating firms for the late filing of their notification.
In a news release on Tuesday, the Philippine Competition Commission (PCC) said AXA and the XL Group are now given the green light to carry on with their transaction. AXA, through its subsidiary Camelot Holdings Ltd., will soon amalgamate with the XL Group, with the latter surviving the merger as a wholly owned subsidiary of AXA.
However, their transaction was the first to be fined for late filing of notification of acquisition to the PCC. Under the PCC’s rules on merger procedure, firms should notify the antitrust agency within 30 days after entering into a definitive agreement. AXA and the XL Group signed the deal executed on March 5, and were mandated to submit a notification on April 4. However, they only filed on June 25, or 112 days after the authorization of their merger, the PCC said.
Merging firms that fail to abide with this regulation may be subjected to a penalty of half of 1 percent of the transaction value. As for the AXA-XL Group case, the fine amounted to P123,861.86.
“We urge firms to observe a standard of diligence in complying with notification requirements across countries whether large or small. Merging parties that file after the notification period, even prior to consummation of the deal, will be fined,” PCC Chairman Arsenio M. Balisacan said.
Although penalized, the PCC judged the transaction will not likely result to a substantial lessening of competition in the relevant market. Aside from the PCC, both AXA and the XL Group will have to file 11 other notifications to different competition authorities, given the global operations of the two firms.
AXA is in the business of life insurance, while the XL Group is established in nonlife insurance.
Acquiring entity AXA is the holding company of the AXA Group, which operates insurance and asset management in Europe, the United States, the Middle East, Latin America and Asia, including the Philippines.