PLDT, Globe, SMC ‘willing’ to submit additional info on telecom deal
The Philippine Competition Commission (PCC) has urged Globe Telecom Inc., PLDT Inc., and San Miguel Corp. (SMC) to immediately refile the notification for the P69.1-billion buyout deal effectively changes the landscape of the telecom industry.
PLDT and Globe committed to equal buyout of SMC’s telecom business under Vega Telecom for P69.1 billion. The PCC was notified about the transaction on May 30.
In separate disclosures to the Philippine Stock Exchange, Globe, PLDT, and SMC said the PCC returned their notifi-cation, requesting for additional details of the transaction.
In a statement late Monday, however, the PCC said it “cannot further comment on the transaction because we have returned the parties’ submissions for non-compliance,” noting the companies must immediately refile an up-dated notification to avoid penalties.
“As of this time therefore, there is no notice for the PCC to review. We emphasize that the transactions have not been deemed approved,” the commission said.
“As conveyed to the parties, they are in the meantime directed to, and should be guided by, Section 17 of the PCA [Philippine Competition Act] which provides that “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”,” it added.
The parties behind the P69.1-billion deal that can revolutionize the telecommunications industry are “willing” to submit additional information and requirements to the PCC.
In separate disclosures, Globe, PLDT, and SMC explained their respective sides on the joint notification, which the PCC cited as “deficient and defective in form and substance” and “needing additional information.”
The PCC is mandated to require parties to mergers and acquisitions (M&As) worth more than P1 billion to file a no-tification letter so the commission may check if there were anti-trust practices and abuse of market dominance as a result of the transaction.
PLDT, Globe, and SMC noted in the disclosures that notification letters sent to the PCC on May 30, a day before the final implementing rules and regulations (IRR) of the commission came into force. The final and approved IRR was officially signed on May 31, and was published in a bid bulletin on June 3.
The three companies noted the PCC returned a joint notification letter on June 7, requesting for additional details on the transaction. The PCC also indicated that submission of the notification letter does not mean the transaction was “deemed approved.”
Not ‘deemed approved’
According to the PCC’s final IRR, parties to M&As are required to submit a notification letter to the PCC, and cannot consummate the transaction until the PCC finishes its evaluation and approves it.
Globe indicated that the joint notification was not under the mandate of the IRR.
In crafting the notification letter, Globe said the companies referred to the PCC’s second memorandum circular—MC 16-002—which stated that the covered transactions are “deemed approved” if “consummated after the effec-tivity of this Memorandum Circular but before the effectivity of the implementing rules and regulations.”
Sought for comment, Bill Luz, co-chairman of the National Competitiveness Council (NCC), said that the two sides —telcos and the PCC—should meet and discuss about transaction, and deliberate on how the competitiveness of the industry can be good for the country’s economy and attract future investment.
Luz said the PCC should be given the chance to prove its mandate and clearly communicate with PLDT, Globe, and SMC the specifications and coverage of the competition law.
The PCA, enacted last year, seeks to promote fair market competition and imposes penalties on unfair market practices, including anti-competitive mergers and acquisitions, abuse of dominant position, cartels, and anti-competitive agreements.
Created in February 2016, the PCC is a quasi-judicial body formed by the PCA to ensure an efficient market compe-tition by leveling the playing field in trade and business, industry, and all commercial economic activities.
It is also tasked to protect the welfare of consumers and advance domestic and international trade and economic development.