The Philippine Competition Commission (PCC) has finally approved Udenna Corp’s $120-million takeover of KGL Investment B.V. (KGLI-BV), a Dutch company that indirectly holds a minority stake in local logistics giant 2GO Group, three months after the antitrust watchdog blocked the deal.
In a statement, the PCC said, it has approved the acquisition by Udenna of the entire outstanding capital stock of KGLI-BV after it found that the deal does not result in substantial lessening of competition with the Philippine market.
“There are no existing horizontal overlaps or vertical relationships that exist between the parties,” the antitrust watchdog said.
The decision comes three months after the PCC rendered the transaction void and imposed a P19.6 million ($374,000) fine on the parties for consummating the deal without clearance from the antitrust commission.
The PCC Mergers and Acquisitions Office (MAO) found that Udenna, a holding company owned by tycoon Dennis Uy, 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.
Uy is the co-founder of Phoenix Petroleum Philippines Inc, and founder of Chelsea Logistics Holding Inc. He is currently the CEO and president of Comstech Integration Alliance Inc, a unit of Manila Electric Co.
Under the Philippine Competition Act (PCA), parties to the merger and acquisition deals above P1 billion ($19 million) are prohibited from consummating their agreement until 30 days after providing notification to the commission.
In compliance with the PCC order, the parties then filed their notification on March 23 and entered the Phase 1 review on April 5. The firms also paid the fine on April 19 at the National Treasury as part of the compliance order,” the PCC said.
Post the deal, Udenna will own 100 per cent of the KGLI-BV.
Udenna is engaged in diverse business interests including distribution and retail of refined petroleum products and lubricants, tankering and inter-island transport of petroleum products and other bulk products.
It is also engaged in ship management, operation of oil depots and storage facilities, operation of an industrial park, real estate or property development, and waste management and environmental services through its subsidiaries.
KGLI-BV, on the other hand, is a holding company maintaining a single investment portfolio in the Philippines, which is the minority interest in KGLI-NM Holdings, Inc.
KGLI-NM’s subsidiary is Negros Navigation, which in turn owns 2Go Group. Negros Navigation and 2Go are domestic corporations with businesses in shipping and logistics.
In a separate disclosure to the Philippine Stock Exchange, 2GO confirmed the approval from the country’s antitrust watchdog.