THE Philippine Competition Commission (PCC) on Thursday said it will review further the proposed merger between two port operators that could affect market competition.
In a statement, the PCC said its Mergers and Acquisitions Office (MAO) has opened a second phase review on the proposed acquisition by International Container Terminal Services Inc. (ICTSI) of shares in Manila North Harbor Port Inc. The review will allow the competition body to conduct a more detailed inquiry into the transaction.
The merger involves ICTSI’s acquisition of shares in Harbor Center Port Terminal Inc., which will bring its holdings to 50 percent. After the transaction, ICTSI will own and control half of Manila North Harbor, with the remaining shares managed by San Miguel Holdings Corp. (43.33 percent), IZ Investment Holdings Inc. (6.5 percent) and Petron Corp. (0.17 percent).
Initial market investigation by the PCC’s MAO assessed the transaction may affect the port industry, particularly those in the business of port operation and transshipment services in the Port of Manila. Under the competition law, the PCC has a period of 60 days to carry out the second phase review starting November 15.
The further review, however, does not mean that there is a conclusive finding of a substantial lessening of competition in the market, the PCC clarified. The second phase review only signifies, according to the agency, that a more in-depth look into the acquisition is required.
“Particularly, PCC’s merger review office seeks to investigate whether the transaction enhances the ability and incentive of the involved firms to engage in foreclosure of competitors where vertical relationships between the ICTSI and Manila North Harbor operations are present, including transshipments,” the statement read.
The antitrust agency called on the public, stakeholders—including importers, exporters, custom brokers, shipping and cargo liners, freight forwarders, truckers, port stevedores and contractors—and trade association members to comment on how the transaction will affect the port industry.
ICTSI is a port operator dealing with international shipments and is located in various countries. It operates in Laguna, Olongapo, Batangas, Davao, Cagayan de Oro and South Cotabato, and owns the Manila International Container Terminal, a large cargo player in the Port of Manila.
Meanwhile, Manila North Harbor services domestic cargoes in the Port of Manila.