URC scores approval to acquire Roxas Holdings' Negros assets

Universal Robina Corp. scored the thumbs up from the Philippine Competition Commission (PCC) to proceed with the acquisition of Roxas Holdings Group assets in Negros Island.

In a decision dated September 3, the anti-trust watchdog said the transaction was unlikely to affect competition in the markets in Negros Island.

"[It] will not likely result in substantial lessening of competition in the markets for the provision of sugar can milling services and tolling services in Negros Island, as well as the national markets for bioethanol, the sale of raw sugar sold in wholesale, and the sale of molasses to traders," the decision read.

Under the Philippine Competition Act (PCA), the PCC is mandated to review mergers and acquisitions to ensure that such deals do not harm the interest of consumers.

The decision was signed by PCC Chairman Arsenio Balisacan, and Commissioners Johannes Benjamin Bernabe, Amabelle Asuncion, Macario De Claro Jr., and Emerson Aquende.

Under the transaction, URC will acquire sugar milling and bio-ethanol distiller assets from Roxas Holdings Inc. (NHI), together with its wholly-owned subsidiaries Central Azucarera de la Carlota Inc. and Roxol Bioenergy Corp.

With this, URC will acquire all buildings, refinery and milling plants, and other assets of CA-Carlota, as well as parcels of land in La Carlota.

URC will also acquire 520,115 shares held by RHI in Najalin Agri-Ventures Inc.

To recall, the PCC blocked a similar transaction last year, when URC attempted to acquire the Roxas Group's assets in Batangas.

"[M]arket investigation raised competition concerns that the proposed merger leads to a monopoly of sugar milling services and will corner farmer-planters in their sharing agreements, sugar recovery rates, and incentives in Southern Tagalog," the PCC said.

"The acquisition by the same parties over the assets in Negros, however, presents a different market environment considering the many players, planters’ strength in numbers translated as bargaining power, and the competitive constraints throughout the country’s sugar producer capital," it added.

Roxas Holdings Inc. was the top gainer among Philippine equities on Monday, with shares up by 12.79 percent to close at P1.94 apiece from last Friday's P1.48 per share.

The company is involved in the business of manufacturing sugar and allied products, with interests in bioethanol and co-generation.

URC shares also climbed on Monday, closing at P140.00 per share or up by 0.79 percent from P138.90 apiece previously.

The Gokongwei-led firm is involved in a range of food-related businesses, including the manufacture and distribution of branded consumer foods; production of hogs and poultry; manufacture of animal feeds, and veterinary products; flour milling; and sugar milling and refining. — DVM, GMA News