Anti-trust regulators have given San Miguel Corp.’s (SMC) power unit the go-signal to acquire the 630-megawatt (MW) Masinloc coal power plant in a $1.9-billion deal.
The purchase — to be done via SMC Global Power Holdings, Inc.’s acquisition of shares in Masin-AES, AES Transpower and AES Philippines — will “not result in substantial lessening of competition in the power generation and retail electricity markets,” the Philippine Competition Commission (PCC) announced on Monday.
“There remains sufficient post-acquisition competitive restraints from competitors in the power generation and retail electricity supply markets,” the PCC said in a February 23 decision, adding that “[t]he transaction is not likely to substantially increase the likelihood that the parties will engage in anti-competitive coordinated behavior.”
San Miguel last December announced that SMC Global had inked an agreement to purchase the 51 percent and 49 percent equity interests of AES Philippines Investment Pte. Ltd. (AES Phil) and Gen Plus B.V., respectively, in Masin-AES Pte. Ltd; 100 percent of AES Corp.’s interest in AES Transpower Private Partners Co. Ltd., and 100 percent of AES Phil’s interest in AES Philippines, Inc.
“The target company,” San Miguel noted in a disclosure, “owns and/or operates the 2×315 MW coal-fired power plant, the 335-MW power project expansion unit … which is under construction and the 10-MW battery energy storage project all located in the province of Zambales…”.
“The implied enterprise value of the company based on the transaction is at $2.4 billion,” SMC said.
“The additional power assets provide an opportunity for the company to increase its footprint in clean coal technology that provides reliable and affordable power, particularly in Luzon,” it added.
“The transaction will result in the production of electricity in an environmentally responsible way.”
The PCC noted that SMC Global’s power generation portfolio currency includes the Sual and San Roque plants in Pangasinan, the Ilijan plant in Batangas, the Limay plant in Bataan, Angat, the Angat plant in Bulacan and Greenfield Powerplants in Davao del Sur and Bataan.
The PCC is mandated under the Philippine Competition Act to review mergers and acquisitions worth at least P1 billion to ensure that these deals will not harm the interest of consumers.