PCC approves Fernwood Holdings acquisition of Liquigaz Philippines

Antitrust watchdog Philippine Competition Commission (PCC) has approved Fernwood Holdings Inc.'s acquisition of Liquigaz Philippines Corp.

In a regulatory filing submitted by Cosco Capital Inc. compliance officer Candy Dacanay-Datuon on Monday, Cosco noted the PCC approval came on Jan. 17, 2019.

“The proposed acquisition by Fernwoood Holdings Inc. of shares in Liquigaz Philippines Corporation will not likely result in substantial lessening of competition within the market for bulk and cylinder supply of liquefied petroleum gas (LPG) in the Luzon geographic market,” Cosco quoted the PCC as saying.

Cosco in October 2018 announced the divestment of its entire stake in Liquigaz Philippines—a local LPG distributor—under a share purchase agreement with Fernwood signed on October 19, 2018.

Cosco, through its subsidiary Canaria Holdings Corp., sold 826,530 shares equivalent to 100 percent of Liquigaz Philippines Corp.

While Cosco did not disclose the value of the deal, it said the amount is “less than 12 percent of the total asset of Cosco Capital Inc. as of December 2017” at P111.61 billion.

The Philippine Competition Act mandates the antitrust commission to review all business transactions valued at P2 billion and above to protect competition in the market and prohibit anticompetitive conduct.

According to Cosco, the PCC approved the business transaction as “there is neither increased ability nor incentive to engage in input foreclosure and customer foreclosure post-acquisition” and that “there exist sufficient competitive constraints on the parties from other market participants in the LPG industry post-acquisition.”  —Jon Viktor Cabuenas/VDS, GMA News