URC PURCHASE OF ROXAS HOLDINGS ASSET OKAYED
The Philippine Competition Commission (PCC) has greenlighted Universal Robina Corporation's (URC) purchase of the sugar milling and bioethanol distillery plants and parcels of land of Roxas Holdings, Inc. (RHI) in Negros Island.
PCCis approval took a year to approve the URC’s purchase of assets in Central Azucarera de la Carlota, Inc. (CA-Carlota) and Roxol Bioenergy Corp. (Roxol), and shares in Najalin Agri-ventures, Inc. (NAVI) as a similar transaction by the same parties was blocked for the merger-to-monopoly concerns in Batangas.
In Commission Decision No. 15-M-010/2020, the PCC approved the transaction considering the overlaps and the market where both sugar millers operate.
While PCC noted that URC and CA-Carlota are among the big players in the area, the review finds that the transaction does not lead to substantial lessening of competition in the sugarcane milling and tolling markets in Negros region, as well as the national markets for bioethanol, wholesale raw sugar, and molasses.
The PCC’s merger review of the URC-CA Carlota deal showed that the transaction will not increase the likelihood of, or strengthen existing, coordination among regional market players for sugar cane milling services.
To recall, PCC blocked last year URC’s attempt to take over Central Azucarera Don Pedro Inc. (CADPI) and RHI—its sole rival in Batangas—after its market 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 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.