PCC approves Udenna-KGL Investment deal

The Philippine Competition Commission (PCC) has approved Udenna Corp.’s acquisition of KGL Investment BV., the majority shareholder of 2GO Group Inc., the antitrust watchdog said Monday.

In a decision on  May 4, the PCC approved the acquisition which would lead to Udenna owning 100 percent of KGLI-BV.

“The acquisition by Udenna Corporation of 100 percent of the outstanding stock of KGL Investment BV is not likely to result in lessening of competition within the Philippine market because there are no existing horizontal overlaps or vertical relationships that exist between the parties,” the commission said.

The decision was signed by PCC Chairman Arsenio Balisacan and Commissioners Johannes Benjamin and Amabelle Asuncion.

In February, the PCC voided the acquisition deal—as the companies did not submit a transaction notification—and imposed a P19.6-million fine against the companies for consummating the deal without clearance from the antitrust commission.

The companies paid the fine on April 19 at the National Treasury as part of the compliance order. 

Under the Philippine Competition Act, the PCC is mandated to review all mergers and acquisitions valued at P2 billion and above to ensure no anti-competitive practice would result post-transaction.

Udenna and KGL Investment notified the PCC on March 23 and entered the Phase 1 review on April 5.

“Under PCC Case No. M-2017-001 promulgated last February 15, the parties were found to have violated Section 17 of the Republic Act No. 10667 and Rule 4, Section 3(b)(4) of its Implementing Rules and Regulations,” the commission noted.

“The PCC Mergers and Acquisitions Office found that Udenna bought the entire shareholdings of KGLI-BV as signed by the two parties through a share purchase agreement dated July 28, 2016, and the deal consummated as reflected in a Deed of Transfer dated August 19, 2016,” it said.

A holding company and parent entity, Udenna is engaged in diverse business interests that include distribution and retail of refined petroleum products and lubricants, tankering and inter-island transport of petroleum products and other bulk products, ship management, operation of oil depots and storage facilities.

It also operates an industrial park and does real estate or property development and waste management and environmental services through its subsidiaries.

KGLI-BV is a holding company maintaining a single investment portfolio in the Philippines, which is the minority interest in KGLI-NM Holdings Inc. (KGLI-NM).

KGLI-NM’s subsidiary Negros Navigation Co. Inc. (NENACO) owns 2Go Group Inc. (2Go). NENACO and 2Go are domestic corporations with businesses in shipping and logistics. KGLI-BV has a minor effective ownership in NENACO and 2Go. —Jon Viktor Cabuenas/VDS, GMA News