Mergers and acquisitions (M&As) worth over P1 billion will have to be brought to the attention of the newly-created Philippine Competition Commission (PCC) as part of the regulatory approval process.
Memorandum Circular 16-001 reiterates the transaction value threshold for M&As required to submit a “compulsory notification” under Republic Act (RA) 10667 or the Philippine Competition Act of 2015.
“Parties to a merger or acquisition agreement wherein the value of the transaction exceeds P1 billion … shall notify the commission through a letter…,” the memorandum states.
RA 10667, which created the PCC, seeks to prevent anti-competitive agreements and M&As as well as the abuse of “dominant position” by any entity.
The details to be disclosed to the PCC should include the respective parties to the M&A, the name and contact details of the authorized representatives of each of the parties; a brief description of the businesses of the parties involved, the type of transaction (whether a merger or an acquisition), the consideration; key transaction terms and the timing or timetable for the execution or implementation of the deal.
M&As that comply with the notification “shall be deemed approved” and “may not be challenged under this law [RA 10667], except when the notification required … contains false material information,” the memorandum states.
Failure to notify the PCC will prompt the exercise Section 17 of RA 10667, which states: “An agreement consummated in violation of this requirement to notify the commission shall be considered void and subject the parties to an administrative fine of 1 percent to 5 percent of the value of the transaction.”
The PCC said a separate memorandum circular will be issued with regard to rules and guidelines of “transactions effected through the Philippine Stock Exchange”.
The commission is chaired by former Socioeconomic Planning Secretary Arsenio Balisacan.