Antitrust body approves Mighty Corp.-Japan Tobacco deal

The Philippine Competition Commission (PCC) has approved the acquisition of beleaguered Mighty Corporation by Japan Tobacco (Philippines) Inc., the antitrust body said on Tuesday.

The commission found the transaction not likely to result in anti-competitive effects in the market.

"There appears to be neither the ability nor incentive for the parties to engage in anti-competitive coordinated behavior ... Sufficient competitive constraints remain from other market participants after the sale," the PCC said in an emailed statement.

Mighty Corp. intends to use the proceeds from the deal—valued at up to P30 billion including value-added tax (VAT) and other fees—to settle its tax liabilities.

In March, the Bureau of Internal Revenue (BIR) sued Mighty Corp. before the Department of Justice for supposedly using bogus tax stamps on its cigarette packs.

Justice Secretary Vitaliano Aguirre II earlier said Mighty Corp. gave in to an offer by President Rodrigo Duterte to pay P3 billion as settlement for its excise tax liabilities.

But Finance Secretary Carlos Dominguez III found the amount too small and said the Bulacan-based cigarette maker should pay 10 times more than its initially assessed liability.

In a letter to Bureau of Internal Revenue Commissioner Caesar Dulay in July, Mighty Corp. said it was willing to pay the government P25 billion.

The Department of Finance (DOF) accepted an initial payment of P3.44 billion, but the company still has to answer for other criminal charges. — VDS, GMA News