The Philippine Competition Commission (PCC) Mergers and Acquisitions Office (MAO) has moved on to a second phase review of Udenna Corporation’s acquisition of shares in KGLI-NM Holdings, Inc., the majority shareholder of 2GO Group, Inc.’s mother company.
In a statement, PCC said MAO on November 10 decided to move to a phase two review, pursuant to Section 17 of Republic Act (RA) No. 10667, or the Philippine Competition Act.
“The initial market investigation conducted by MAO indicates that the Transaction may affect the logistics and domestic shipping industry, particularly passenger and cargo transport, and its related and complementary services,” PCC said.
Under R.A. 10667 and its implementing rules, MAO has 60 days from November 10 to conduct the Phase 2 review of the transaction.
Commencing a phase two review, PCC said, does not signify that MAO has made a definitive finding of a substantial lessening of competition, or prejudged the final result of the review.
“This merely signifies that the transaction requires a more detailed analysis based on further information requested from the notifying parties and such information as may be necessary to complete the review,” PCC pointed out.
Chelsea Logistics Holdings Corp. (CLHC) proposes to acquire shares representing 50.37% of KGLI-NM from Negros Holdings & Management Corp. (NHMC), and 9.93% of shares in KGLI-NM from ES Consultancy Group, Inc.
CLHC is currently a wholly owned subsidiary of Udenna, whose portfolio includes Phoenix Petroleum Holdings, Inc. Udenna, through CLHC, is engaged in domestic shipping activities, while Phoenix and its subsidiaries supply and distribute fuel.
KGLI-NM holds 60% of the shares in Negros Navigation Co., Inc. (NENACO), a domestic shipping company in the Philippines. NENACO in turn owns 88.93% of shares in 2GO Group, which is engaged in the transport of people and cargo through its shipping and logistics subsidiaries.
Udenna’s entry in 2Go started in September 2016, when the former obtained 21% of the shares of Netherlands-based KGL Investment B.V., which owns about 60% of KGLI-NM.
CLHC last March acquired a 28.15% indirect economic interest in 2Go.
Last October, PCC approved CLHC’s proposed acquisition of domestic ferry operator Starlite Ferries, Inc. On November 8, the company also acquired all of the outstanding shares of stock of Worklink Services, Inc., a total logistics management company that provides ground courier, sea freight, and air freight services across the country.
Image courtesy of Sira Anamwong at FreeDigitalPhotos.net
