THE country’s antitrust regulator on Wednesday began its review of the merger between Chelsea Logistics Holdings Corp. and Trans-Asia Shipping Lines Inc., which it earlier nullified due to competition concerns.
The Philippine Competition Commission commenced the first-phase review of the Chelsea and Trans-Asia deal it voided on July 28. The PCC has earlier decided to invalidate the transaction after the parties failed to notify the government.
On the same date, the PCC conditionally approved Chelsea’s purchase of shares in KGLI-NM Holdings Inc., which owns 2Go Group Inc. The antitrust agency argued it eliminated competition concerns brought about by Udenna Corp.’s common ownership of both 2Go and Trans-Asia with the nullification of the deal involving Chelsea and Trans-Asia.
The PCC said the parties moved that both decisions be reconsidered and the penalties, resulting from their failure to notify the government, be reduced. Udenna Chairman and CEO Dennis A. Uy and other representatives signified their intent to abide by compulsory notification requirements under Section 17 of the Philippine Competition Act.
“They further expressed their willingness to offer voluntary commitments to address the competition concerns from Udenna’s concurrent ownership of 2Go and Trans-Asia. These include the commitment to be bound by a price monitoring scheme and provide necessary information to implement the same,” the PCC said.
The subsequent notification and the proposal of voluntary commitments were considered as mitigating factors, which led the agency to set the applicable administrative fine at 1 percent of the transaction value at P11.4 million.
“Compliance is the cornerstone of fostering a culture of competition. The competition law is fair as it rewards faithful observance of the rules, while it penalizes violations,” said Arsenio M. Balisacan, chairman of the PCC.
Based on its review, the PCC found that control of both 2Go and Trans-Asia by Chelsea will result in a substantial lessening of competition on roll-on, roll-off passenger shipping lines in six legs. These legs are Cebu to Cagayan de Oro; Cagayan de Oro to Cebu; Cebu to Ozamis; Ozamis to Cebu; Cebu to Iligan; and Iligan to Cebu.