Diversified conglomerate San Miguel Corp. said it will continue to work with anti-trust body Philippine Competition Commission to obtain a favorable decision on its planned acquisition of the assets of Holcim Philippines Inc.
“We are aware of the concerns raised by the Philippine Competition Commission on the company’s proposed acquisition of Holcim Philippines, and are committed to achieving a favorable outcome of the review process,” San Miguel said in a statement over the weekend.
“We firmly believe that the acquisition of Holcim by San Miguel Corporation, a Filipino company, will be beneficial to consumers, the industry, and our country’s development,” it added.
The PCC on Friday issued a statement saying its Mergers and Acquisitions Office had flagged competition concerns in San Miguel’s proposed takeover of Holcim, citing monopoly, increased market power and a potential collusion arising from the merger.
The MAO in a review said the buyout by San Miguel through unit First Stronghold Cement Industries Inc. would result in a substantial lessening of competition in the market for grey cement in four key areas in the Philippines, namely Central Luzon, Northwest Luzon, Northeast Luzon and Greater Metro Manila.
Holcim manufactures and distributes cement through its eight facilities in the Philippines.
San Miguel, through parent Top Frontier Investments Holdings Inc., has two cement plants that are scheduled to start commercial operations within the next two years.
The family of San Miguel president and chief operating officer Ramon Ang also owns Eagle Cement, which has a facility in Bulacan and is in the process of completing a new plant in Cebu.
“The MAO’s market investigation confirms that the cement industry is vulnerable to cartel behavior. Market conditions in the cement industry facilitate an environment where it may sustain anti-competitive agreements. Considering that the transaction will reduce the number of competitors in the identified geographic markets, it will further aggravate pre-existing market conditions,” the PCC said.
