Court of Appeals reaffirms sale of SMC business to PLDT, Globe

The Court of Appeals (CA) in the Philippines has formally confirmed the legality of the PHP69.1 billion (USD1.4 billion) joint acquisition by PLDT Inc. and Globe Telecom of the telecoms assets of San Miguel Corp (SMC). In its decision, the CA supported the pair’s legal bid to void the Philippine Competition Commission’s (PCC) bid to conduct a pre-acquisition review and investigation of the deal, calling on the PCC to recognise the co-acquisition as ‘deemed approved by operation of law’. In its ruling, the court concluded that the sale met all requirements of the competition watchdog’s legal guidelines, and specifically Memorandum Circular MC 16-002, which mandates parties to mergers or acquisition agreements amounting to more than PHP1 billion to notify the PCC of the transaction, according to the CA. The court said though that MC 16-002 did not require the submission of transaction documents, ‘or any document for that matter,’ as a condition for the validity of the notice. In its ruling, the CA said that the regulator, the National Telecommunications Commission (NTC), has the power and technical expertise to allocate radio frequencies and ‘the PCC has no authority to review, reverse or modify the NTC’s decision’. In other words, ‘the NTC’s radio frequency allocation stands independent of the PCC’s determination of the competition-related aspects of such allocation,’ the ruling stated.