February 27, 2018 | 12:04 am
THE Philippine Competition
Commission (PCC) has approved a San Miguel Corp. (SMC) subsidiary’s acquisition
of the 630-megawatt (MW) Masinloc coal-fired power plant in Zambales.
In its decision dated Feb. 23, 2018,
the antitrust watchdog said the acquisition of the power plant by SMC Global
Power Holdings Corp. does not result in a substantial lessening of competition
in the relevant markets.
The approval comes after SMC Global
announced in December last year that it had reached a share purchase agreement
with the two equity holders of the power plant’s owner, Masin-AES Pte. Ltd. in
a deal worth $1.9 billion.
In clearing the deal, PCC cited
three reasons, first: “There remain sufficient post-acquisition competitive
constraints from competitors in the power generation and retail electricity
supply market.”
“There appears neither increased
ability nor incentive to engage in anti-competitive foreclosure, post
acquisition,” it added.
Thirdly, the PCC said: “The
transaction is not likely to substantially increase the likelihood that the
parties will engage in anti-competitive coordinated behavior.”
PCC said it rendered its decision
based solely on the facts and circumstances of the transaction disclosed by SMC
Global and AES Corp.
The proposed transaction involves
the acquisition by SMC Global of a 51% and 49% equity interests of AES Phil
Investment Pte. Ltd. and Gen Plus B. V. respectively, in Masin-AES. It also
involves the acquisition of a 100% equity interest of AES Corp. in AES
Transpower Pte. Ltd., and 100% equity interest of AES Phil in AES Philippines,
Inc.
SMC Global’s portfolio in the power
generation includes Sual Power Plant in Sual, Pangasinan; San Roque
Hydroelectric Multipurpose Power Project in San Manuel, Pangasinan; Ilijan
Power Plant in Ilijan, Batangas, among others.
PCC said SMC Global intends to
improve its baseload capacity to provide affordable and reliable supply of
power to its customers, while AES Corp. aims to re-shape its global portfolio
of businesses and markets to be consistent with its new strategy.
“As to Gen Plus B.V., their objective
in pursuing the transaction is to focus on its existing power plant portfolio
in the Luzon market and to pursue new development and investment opportunities
for thermal and renewable power plants in the Philippines,” it added.
As a result of the transaction, SMC
Global will become the 100% owner of each of Masin-AES, AES Transpower and AES
Philippines. — Victor V. Saulon
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