By BERNIE CAHILES-MAGKILAT San Miguel Corporation’s (SMC) subsidiary Top Frontier Investment Holdings, Inc. (Top Frontier) and Holcim Philippines, Inc. (HPI) formally withdrew their merger notification from the antitrust commission, the Philippine Competition Commission (PCC) reported. Under PCC’s rules, merger parties are required to inform the Commission of any substantial modification to their notified transaction, including the decision to abandon or withdraw it. In its letter to PCC, Top Frontier, representing SMC and its subsidiary First Stronghold Cement Industries, Inc. (FSCII), said its group shall no longer pursue another merger in similar or related markets involving the same parties as the proposed transaction. For its part, HPI said it will no longer submit comment on the allegations raised in the Statement of Concerns by the PCC’s Mergers and Acquisitions Office (MAO) given the aborted deal. To recall, PCC's MAO flagged competition concerns arising from the merger such as monopoly in Northwest Luzon, and increased market power and potential collusion among inter-related cement companies controlled by FSCII in the Northeast Luzon, Central Luzon, and Greater Metro Manila areas. The Commission provided the parties due course to address the competition concerns raised by MAO. PCC reverted to Phase 2 review of the transaction when the parties’ proposed voluntary commitments were rejected due to legal and enforceability issues. The withdrawal came to pass during the final stage of the Phase 2 review, at a time when the proceedings were suspended in compliance with the Bayanihan to Heal as One Act and Administrative Order No. 30, subsequent to the community quarantine imposed amid the COVID-19 health crisis. “PCC recognizes how the pandemic is changing the global economic landscape, sowing change in firms’ appetite for mergers, and causing severe disruption to businesses in the Philippines and abroad. Ultimately, we defer to SMC and HPI on their business decisions,” said PCC Chairman Arsenio M. Balisacan. Prior to the formal notification to the PCC, SMC’s FSCII had disclosed before the Philippine Stock Exchange that it was no longer proceeding the acquisition of HPI upon the lapse of the parties’ agreement on Sunday, 10 May 2020. In response to the disclosure, PCC clarified that they are not the reason for the botched merger of cement firms but that there are anti-trust issues that the parties have yet to address. In fact, PCC noted that the Phase 2 review of FSCII’s acquisition of cement firm Holcim Philippines Inc. was suspended under Administrative Order No. 30 following the implementation of the Enhanced Community Quarantine (ECQ) in Luzon. PCC stressed that “SMC’s disclosure to the Philippine Stock Exchange was made close to the end of PCC’s Phase 2 review of the transaction, which was suspended by Administrative Order No. 30 rendering all proceedings interrupted until the end of the community quarantine.” The Commission noted that the 10 May 2020 deadline was internally agreed upon by the transact¬ing parties and was within their prerogative to extend as needed. “The PCC, as antitrust authority, acts in accordance with its statutory timelines,” PCC said. SMC’s decision not to proceed with the acquisition of Holcim Philippines comes after the Commission rejected the parties’ several proposals for voluntary commitments, and after the parties had requested several extensions to file their required comment to the Statement of Concerns (SOC) submitted by the PCC’s Mergers and Acquisitions Office (MAO) to the Commission. To recall, PCC's MAO flagged competition concerns arising from the merger such as monopoly in Northwest Luzon, and increased market power and potential collusion among inter-related cement companies controlled by FSCII in the Northeast Luzon, Central Luzon, and Greater Metro Manila areas. The Phase 2 review of the transaction was suspended upon the parties’ submission of voluntary commitments. PCC rejected the proposed commitments after they were found insufficient to address the competition concerns, reverting the transaction to Phase 2 review. The parties, however, have yet to file their respective comments to answer the competition concerns raised in the SOC. The PCC is cognizant of the changes in market conditions during these extraordinary times, and as such, supports the promotion of business and their respective re-calibration of decisions in response to these conditions.