Philippines Raises Thresholds for Compulsory M&A Notifications

Transcription

1 Regional Competition Philippines Raises Thresholds for Compulsory M&A Notifications Higher Thresholds for Merger Notification in the Philippines The Philippine Competition Commission ( PCC ) has raised the thresholds for required notifications of mergers and acquisitions ( M&A ). Under the Philippine merger control regime, a transaction will trigger premerger reporting requirements to the PCC if they satisfy two tests: Size of Person and Size of Transaction. In a memorandum circular issued on 5 March 2018, the PCC raised the new thresholds to 5 Billion Pesos for the Size of Person and 2 Billion Pesos for the Size of Transaction, up from 1 Billion Pesos each. Under the new thresholds, parties to a merger or acquisition are required to provide notification to the PCC where, broadly speaking: (a) (b) The value of assets or revenues of the Ultimate Parent Entity of at least one of the parties exceeds 5 Billion Pesos; and The value of the assets or revenues of the acquired entity exceeds 2 Billion Pesos. The memorandum circular also establishes the automatic adjustment of the threshold every year beginning 1 March 2019 based on the official estimate of the nominal Gross Domestic Product ( GDP ) growth of the previous calendar year, rounded up to the nearest hundred million. In its press release, the PCC explained that adjustments to the merger notification thresholds stem from various considerations, including the size of actual notifications to date, the country s economic growth, overall inflation, and the need to ensure efficient use of the PCC s limited resources. The annual adjustment based on nominal GDP growth is to ensure that the thresholds maintain their real value over time and relative to the size of the economy. The new thresholds take effect 15 days from 5 March The revised thresholds will apply to M&A transactions with definitive agreements executed after this effective date. They do not apply to mergers or acquisitions pending review by the PCC, notifiable transactions consummated before the effective date, or to transactions that are already the subject of a decision by the PCC. Implications to Businesses Businesses should welcome this development, as the increased thresholds mean that transactions that were notifiable under the initial thresholds may no longer need to be notified to the PCC. Given the PCC s active enforcement of the merger control regime, businesses must remain alert to the M&A notification requirements and thresholds in the Philippines. If you have any further comments or questions on this update, please feel free to contact our team below. 1

2 Contacts Kala Anandarajah Head (Singapore), Competition & Antitrust and Trade D (65) F (65) kala.anandarajah@rajahtann.com Dominique Lombardi (Foreign Lawyer) Competition & Antitrust and Trade D (65) F (65) dominique.lombardi@rajahtann.com Tanya Tang (Chief Economic and Policy Advisor) Competition & Antitrust and Trade D (65) F (65) tanya.tang@rajahtann.com Kuok Yew Chen D (603) F (603) yew.chen.kuok@christopherleeong.com Yon See Ting D (603) F (603) see.ting.yon@christopherleeong.com HMBC Rikrik Rizkiyana Assegaf Hamzah & s D (62) F (62) rikrik.rizkiyana@ahp.co.id Yogi Sudrajat Marsono Assegaf Hamzah & s D (62) F (62) yogi.marsono@ahp.co.id Melisa Uremovic D (66) F (66) melisa.u@rajahtann.com Supawat Srirungruang D (66) F (66) supawat.s@rajahtann.com Vu Thi Que Rajah & Tann LCT Lawyers D (84) F (84) que.vu@rajahtannlct.com Norma Margarita B. Patacsil Gatmaytan Yap Patacsil Gutierrez & Protacio (C&G Law) D (632) F (632) nmbpatacsil@cagatlaw.com 2

3 For more information on issues arising in specific countries, please contact the persons above. For issues arising in a country not listed above, please feel free to contact the Singapore team in the first instance or competitionlaw@rajahtann.com. Please feel free to also contact Knowledge and Risk Management at eoasis@rajahtann.com 3

4 Our Regional Contacts T F sg.rajahtannasia.com T F R&T Sok & Heng Law Office T / 113 F kh.rajahtannasia.com Rajah & Tann NK Legal Myanmar Company Limited T / / F mm.rajahtannasia.com Shanghai Representative Office T F cn.rajahtannasia.com Gatmaytan Yap Patacsil Gutierrez & Protacio (C&G Law) T to 79 / to 32 / F Assegaf Hamzah & s Jakarta Office T F Surabaya Office T F Rajah & Tann (Laos) Sole Co., Ltd. T F la.rajahtannasia.com T F th.rajahtannasia.com Rajah & Tann LCT Lawyers Ho Chi Minh City Office T / F Hanoi Office T F Member firms are constituted and regulated in accordance with local legal requirements and where regulations require, are independently owned and managed. Services are provided independently by each Member firm pursuant to the applicable terms of engagement between the Member firm and the client. 4

5 Our Regional Presence is one of the largest full service law firms in Singapore, providing high quality advice to an impressive list of clients. We place strong emphasis on promptness, accessibility and reliability in dealing with clients. At the same time, the firm strives towards a practical yet creative approach in dealing with business and commercial problems. As the Singapore member firm of the Lex Mundi Network, we are able to offer access to excellent legal expertise in more than 100 countries. is part of Rajah & Tann Asia, a network of local law firms in Singapore, Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Thailand and Vietnam. Our Asian network also includes regional desks focused on Japan and South Asia. The contents of this Update are owned by and subject to copyright protection under the laws of Singapore and, through international treaties, other countries. No part of this Update may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, broadcast (including storage in any medium by electronic means whether or not transiently for any purpose save as permitted herein) without the prior written permission of. Please note also that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice for any particular course of action as such information may not suit your specific business and operational requirements. It is to your advantage to seek legal advice for your specific situation. In this regard, you may call the lawyer you normally deal with in or Knowledge & Risk Management at eoasis@rajahtann.com. 5