PCC Sets Updated Merger Notification Thresholds

Beginning 16 September 2022, the Philippine Competition Commission (“PCC”) will implement updated thresholds for compulsory notification of mergers and acquisitions in the amounts of Php 6.1 billion for Size of Party threshold and Php 2.5 billion for Size of Transaction threshold.

The Philippine Competition Act (R.A. 10667 or “PCA”) provides that parties to a merger or acquisition agreement (“M&As”) must notify the PCC when the value of assets or revenues of the ultimate parent entity (or “Size of Party”) of at least one of the parties and the value of assets or revenues of the acquired entity (or “Size of Transaction”) meets both thresholds. These transactions will be subject to a merger review before they are consummated.

The Bayanihan to Recover as One Act (R.A. 11494 or “Bayanihan 2”) set temporary thresholds of Php 50 billion for Size of Party and Size of Transaction, valid until 15 September 2022.

PCC will implement the updated thresholds starting 16 September 2022. M&As that reach the Size of Party threshold of Php 6.1 billion and a Size of Transaction Threshold of Php 2.5 billion must notify the PCC for mandatory merger review. These thresholds will remain effective until the Commission en banc approves new thresholds for compulsory notification.

Parties who wish to confirm that they are excluded from compulsory notification under the previous Php 50 billion thresholds should submit to the PCC’s Mergers and Acquisition Office the following:  a) definitive agreements signed before 16 September 2022; and b) a Letter of Non-Coverage.

It should be noted that transactions from the last two (2) years which may have led to monopolies or adverse effects in the market can be reported to the PCC regardless of thresholds.