MANILA — Udenna Corp. and KGL Investment Cooperatief (KGLI Coop) are facing twin penalties following the decision of the Philippine Competition Commission (PCC) on the transaction between the two companies.
In a decision released Monday, PCC said the sale of KGLI Coop shares in KGL Investment B.V. (KGLI B.V.) to Udenna, which is worth USD120 million, breached the PHP1-billion threshold for the companies to notify the Commission, but the firms failed to notify the antitrust body.
PCC said the value of transaction should involve the 100-percent shareholdings of KGLI B.V., which had a 39.71-percent stake in KGLI-NM Holdings, Inc., part-owner of Negros Navigation Co., Inc.
The antitrust body initiated the investigation after it received a complaint on Dec. 28, 2016 that the companies proceeded with the transaction without notifying the PCC.
“Udenna and KGLI Coop initially sought to be excused from notification, claiming that the buyout satisfies the “size of person test,” but not the “size of transaction test” required under the Philippine Competition Act and its implementing rules,” the PCC said.
“But Merger and Acquisition Office investigation found that the transaction met the threshold based on both tests. The aggregate annual gross revenues in, into or from the Philippines, or the value of the assets in the Philippines of Udenna were both above PHP1 billion at the time of the transaction,” the Commission explained.
The penalties to be imposed include an administrative fine of PHP19.6 million or equivalent to 1 percent of the transaction and considering the deal as void since the agreement was consummated in violation of the compulsory notification.
PCC said the parties can still proceed with the deal after proper notification of the Commission and undergoing the merger review process. (PNA)
