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The Philippine Competition Commission (PCC) has approved Infroneer Holdings Inc.’s acquisition of Sumitomo Mitsui Construction Co. Ltd., saying it will not lessen competition in the country.
In a statement, the antitrust body said such a transaction between the two Japanese firms is “unlikely to result in a substantial lessening of competition in the local construction and infrastructure sector.”
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The PCC said in a statement that based on its review, “the two companies do not have horizontal overlaps—that is, they do not operate in the same line of business—and no vertical relationships, such as one company supplying goods or services to the other.”
Infroneer, a Tokyo-based infrastructure services company, plans to make Sumitomo its wholly owned subsidiary through a public takeover bid.
The acquisition involves at least 104.6 million shares in Sumitomo for 600 Japanese yen per share via tender offer. This is subject to the fulfillment of conditions precedent, including the approval from the PCC.
According to a document detailing Infroneer’s tender offer, the acquisition will further strengthen the domestic construction business, expand the scale of overseas business and improve management efficiency.
The PCC said Infroneer currently has no operations in the Philippines, particularly in the local construction sector.
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Infroneer is involved in infrastructure services, such as planning, design, construction and operations and maintenance; and its subsidiaries are involved in construction, paving, manufacturing and sales of construction machinery.
Sumitomo, a Tokyo-based general construction company, operates in the Philippines through its Manila office and SMCC Philippines Inc. It is engaged exclusively in infrastructure projects funded through the official development assistance from the Japanese government.
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“This assessment is part of the PCC’s mandate to ensure that mergers and acquisitions do not harm competition…,” the PCC said. —JORDEENE B. LAGARE
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