CHAPTER IV
Mergers and Acquisitions
SECTION 16. Review of Mergers and Acquisitions. — The Commission
shall have the power to review mergers and acquisitions based on
factors deemed relevant by the Commission.
SECTION 17. Compulsory Notification. — Parties to the merger or
acquisition agreement referred to in the preceding section wherein the
value of the transaction exceeds one billion pesos (P1,000,000,000.00)
are prohibited from consummating their agreement until thirty (30)
days after providing notification to the Commission in the form and
containing the information specified in the regulations issued by the
Commission: Provided, That the Commission shall promulgate other
criteria, such as increased market share in the relevant market in
excess of minimum thresholds, that may be applied specifically to a
sector, or across some or all sectors, in determining whether parties to a
merger or acquisition shall notify the Commission under this Chapter.
An agreement consummated in violation of this requirement to
notify the Commission shall be considered void and subject the parties to
an administrative fine of one percent (1%) to five percent (5%) of the value
of the transaction.
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Should the Commission deem it necessary, it may request further
information that are reasonably necessary and directly relevant to the
prohibition under Section 20 hereof from the parties to the agreement
before the expiration of the thirty (30)-day period referred. The issuance
of such a request has the effect of extending the period within which the
agreement may not be consummated for an additional sixty (60) days,
beginning on the day after the request for information is received by the
parties: Provided, That, in no case shall the total period for review by the
Commission of the subject agreement exceed ninety (90) days from initial
notification by the parties.
When the above periods have expired and no decision has been
promulgated for whatever reason, the merger or acquisition shall be
deemed approved and the parties may proceed to implement or
consummate it. All notices, documents and information provided to or
emanating from the Commission under this section shall be subject to
confidentiality rule under Section 34 of this Act except when the release of
information contained therein is with the consent of the notifying entity or
is mandatorily required to be disclosed by law or by a valid order of a
court of competent jurisdiction, or of a government or regulatory agency,
including an exchange.
In the case of the merger or acquisition of banks, banking
institutions, building and loan associations, trust companies, insurance
companies, public utilities, educational institutions and other special
corporations governed by special laws, a favorable or no-objection ruling
by the Commission shall not be construed as dispensing of the
requirement for a favorable recommendation by the appropriate
government agency under Section 79 of the Corporation Code of
the Philippines.
A favorable recommendation by a governmental agency with
a competition mandate shall give rise to a disputable presumption that
the proposed merger or acquisition is not violative of this Act.
SECTION 18. Effect of Notification. — If within the relevant periods
stipulated in the preceding section, the Commission determines that such
agreement is prohibited under Section 20 and does not qualify for
exemption under Section 21 of this Chapter, the Commission may:
(a) Prohibit the implementation of the agreement;
(b) Prohibit the implementation of the agreement unless and until it
is modified by changes specified by the Commission;
(c) Prohibit the implementation of the agreement unless and until
the pertinent party or parties enter into legally enforceable
agreements specified by the Commission.
SECTION 19. Notification Threshold. — The Commission shall, from
time to time, adopt and publish regulations stipulating:
(a) The transaction value threshold and such other criteria subject to
the notification requirement of Section 17 of this Act;
(b) The information that must be supplied for notified merger or
acquisition;
(c) Exceptions or exemptions from the notification requirement; and
(d) Other rules relating to the notification procedures.
SECTION 20. Prohibited Mergers and Acquisitions. — Merger or
acquisition agreements that substantially prevent, restrict or
lessen competition in the relevant market or in the market for goods or
services as may be determined by the Commission shall be prohibited. AScHCD
SECTION 21. Exemptions from Prohibited Mergers and Acquisitions. —
Merger or acquisition agreement prohibited under Section 20 of this
Chapter may, nonetheless, be exempt from prohibition by the
Commission when the parties establish either of the following:
(a) The concentration has brought about or is likely to bring about
gains in efficiencies that are greater than the effects of any
limitation on competition that result or likely to result from
the merger or acquisition agreement; or
(b) A party to the merger or acquisition agreement is faced with
actual or imminent financial failure, and the agreement
represents the least anti-competitive arrangement among the
known alternative uses for the failing entity's assets:
Provided, That an entity shall not be prohibited from continuing to
own and hold the stock or other share capital or assets of
another corporation which it acquired prior to the approval of
this Act or acquiring or maintaining its market share in a
relevant market through such means without violating the
provisions of this Act:
Provided, further, That the acquisition of the stock or other share
capital of one or more corporations solely for investment and
not used for voting or exercising control and not to otherwise
bring about, or attempt to bring about the prevention,
restriction, or lessening of competition in the relevant market
shall not be prohibited.
SECTION 22. Burden of Proof. — The burden of proof under Section
21 lies with the parties seeking the exemption. A party seeking to rely on
the exemption specified in Section 21 (a) must demonstrate that if the
agreement were not implemented, significant efficiency gains would not
be realized.
SECTION 23. Finality of Rulings on Mergers and Acquisitions.
— Merger or acquisition agreements that have received a favorable ruling
from the Commission, except when such ruling was obtained on the basis
of fraud or false material information, may not be challenged under
this Act.
||| (Philippine Competition Act, Republic Act No. 10667, [July 21, 2015])
