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‘Changes in circumstances’ prompted SM to back out of Goldilocks deal —PCC


Changes in the commercial aspects of the bakeshop business supposedly prompted SM Retail Inc. to back out of the acquisition deal with Goldilocks Bakeshop Inc., the Philippine Competition Commission (PCC) said Thursday.

“What they told us in the letter was they reviewed .... So, circumstances surrounding Goldilocks obviously changed and they had to reassess the commercial aspects of the transaction in the first place,” PCC Commissioner Stella Luz Quimbo told reporters on the sidelines of the 2018 Manila Forum on Competition in Developing Countries in Makati City.

“Regarding the proposed acquisition by SM Retail of Goldilocks, both SM and Goldilocks have jointly agreed not to pursue the transaction given changes in the general business environment,” SM said in a separate statement. It did not elaborate.

The PCC said earlier this month it approved SM-Goldilocks acquisition deal, albeit with certain conditions. The antitrust body is mandated by law to review all business transactions valued at P1 billion and above.

In conjunction with the approval, SM agreed to open its books to random and independent audits to make sure that all competitors of Goldilocks operating in SM shopping malls do business in a level playing field.

“It would seem like these changes in their circumstances happened after we approved their commitments,” Quimbo noted.

“The only two things that they told us were that they reviewed the commercial aspects and, second, they alluded to changes in the circumstances of Goldilocks,” she said.

Quimbo noted the PCC was informed earlier this week that the transaction will no longer push through.

“We received word from the parties early this week that they decided, after considering the commercial aspects of the transaction, not to proceed,” she said.

“It is unfortunate that it has ended this year ... It is a business decision we obviously respect,” she added. —VDS, GMA News

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