PCC to scrutinize Universal Robina’s acquisition of sugar mill

The Philippine Competition Commission (PCC) will put Universal Robina Corp.’s planned acquisition of Roxas Holdings Inc.’s sugar mill in Batangas under review, after receiving feedback from stakeholders.

"With respect to Universal Robina Corp.’s acquisition of Central Azucarera Don Pedro, the Mergers & Acquisitions Office has issued a Statement of Concerns finding that the transaction will likely result in a substantial lessening of competition in the market for sugarcane milling services in Batangas, Cavite, Laguna, and Quezon,” PCC Chairman Arsenio Balisacan said in a briefing in Quezon City on Friday.

“After careful deliberation and consultation with the affected stakeholders, the commission decided last Tuesday to reject the voluntary commitments offered by the parties, as these do not sufficiently address the anticompetitive effects arising from the transaction,” Balisacan said.

The PCC will now proceed with the review track of the “merger-to-monopoly” transaction.

Early this month, the Gokongwei-led food conglomerate submitted to the Mergers and Acquisition Office its voluntary commitments to address competition issues arising from its plan to buy the sugar mill.

URC’s commitments include higher sugar recovery rates for 10 years after the acquisition is completed.

The food conglomerate committed to help farmers with fertilizer, cash loans, and mechanical harvester, and raise their share of raw sugar from the mill.

URC notified the PCC in June 2018 of its plan to buy the sugar mill.
The antitrust body has since conducted a preliminary review of the transaction and decided to extend it within 60 days from August 7 for a more detailed inquiry on  whether the transaction is likely to cause a substantial lessening of competition in identified markets.

In August 2018, URC said it reached an agreement with Roxas Holdings to acquire the milling and refining assets of its wholly-owned subsidiary Central Azucarera Don Pedro in Batangas.

“This transaction is expected to enhance the capability of URC to produce good quality refined sugar,” according to Universal Robina.

The transaction may only be consummated once approved by the commission. —VDS, GMA News