Article 43Supplement v1, p. 43

COMMERCIAL LAWS SUPPLEMENT

ii. the gross revenues generated in or into the Philippines

by those assets acquired outside the Philippines exceed

One Billion Pesos (PhP1,000,000,000.00).

(3) With respect to a proposed merger or acquisition of

assets inside and outside the Philippines, if

i. the aggregate value of the assets in the Philippines of

the

acquiring

entity

exceeds

One

Billion

Pesos

(PhP1,000,000,000.00); and

ii. the aggregate gross revenues generated in or into the

Philippines by assets acquired in the Philippines and any

assets

acquired

outside

the

Philippines

collectively

exceed One Billion Pesos (PhP1,000,000,000.00).

(4) With respect to a proposed acquisition of (i) voting

shares

of

a

corporation

or

of

(ii)

an

interest

in

a

non-corporate entity

i. If the aggregate value of the assets in the Philippines

that are owned by the corporation or non-corporate

entity or by entities it controls, other than assets that are

shares of any of those corporations, exceed One Billion

Pesos (PhP1,000,000,000.00); or

ii. The gross revenues from sales in, into, or from the

Philippines of the corporation or non-corporate entity or

by entities it controls, other than assets that are shares of

any of those corporations, exceed One Billion Pesos

(PhP1,000,000,000.00); and

iii. If

A. as a result of the proposed acquisition of the voting

shares of a corporation, the entity or entities acquiring

the shares, together with their affiliates, would own

voting shares of the corporation that, in the aggregate,

carry more than the following percentages of the votes

attached

to

all the corporation's outstanding voting

shares:

I. Thirty-five percent (35%), or

II. Fifty percent (50%), if the entity or entities already own

more than the percentage set out in subsection I above,

as the case may be, before the proposed acquisition; or

B. as a result of the proposed acquisition of an interest in

a non-corporate entity, the entity or entities acquiring the

interest, together with their affiliates, would hold an

aggregate

interest

in

the

non-corporate

entity

that

entitles the entity or entities to receive more than the

following percentages of the profits of the non-corporate

entity

or

assets

of that non-corporate entity on its

dissolution:

I. Thirty-five percent (35%), or

II. Fifty percent (50%), if the entity or entities acquiring the

interest are already entitled to receive more than the

percentage set out in subsection I immediately above

before the proposed acquisition.

(c)

Where

an

entity has already exceeded the 35%

threshold for an acquisition of voting shares, or the 35%

threshold

for

an

acquisition

of

an

interest

in

a

non-corporate entity, another notification will be required

if the same entity will exceed 50% threshold after making

a further acquisition of either voting shares or an interest

in a non-corporate entity.

(d) In a notifiable joint venture transaction, an acquiring

entity shall be subject to the notification requirements if

either (i) the aggregate value of the assets that will be

combined in the Philippines or contributed into the

proposed

joint

venture

exceeds

One

Billion

Pesos

(PhP1,000,000,000.00)

or

(ii)

the

gross

revenues

generated in the Philippines by assets to be combined in

the Philippines or contributed into the proposed joint

venture exceed One Billion Pesos (PhP1,000,000,000.00).

In

determining

the assets of the joint venture, the

following shall be included:

1)

All

assets

which

any

entity

contributing

to

the

formation of the joint venture has agreed to transfer, or

for which agreements have been secured for the joint

venture to obtain at any time, whether or not such entity

is subject to the requirements of the act; and

2) Any amount of credit or any obligations of the joint

venture which any entity contributing to the formation

has agreed to extend or guarantee, at any time.

(e) A merger or acquisition consisting of successive

transactions, or acquisition of parts of one or more

entities, which shall take place within a one-year period

between the same parties, or any entity they control or

are controlled by or are under common control with

another

entity

or

entities,

shall

be

treated

as

one

transaction. If a binding preliminary agreement provides

for such successive transactions or acquisition of parts,

the entities shall provide notification on the basis of such

preliminary agreement. If there is no binding preliminary

agreement, notification shall be made when the parties

execute the agreement relating to the last transaction

which,

when

taken

together

with

the

preceding

transactions, satisfies the thresholds under this Section.

(f) For purposes of calculating notification thresholds:

(1) The aggregate value of assets in the Philippines shall

be as stated on the last regularly prepared balance sheet

or the most recent audited financial statements in which

those assets are accounted for.

(2) The gross revenues from sales of an entity shall be the

amount stated on the last regularly prepared annual

statement of income and expense of that entity.

(g) A transaction that meets the thresholds and does not

comply with the notification requirements and waiting

periods set out in Section 5 shall be considered void and

will subject the parties to an administrative fine of one

percent (1%) to five percent (5%) of the value of the

transaction.

(h) In the case of a 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

with

the

requirement

for

a

favorable

recommendation by the appropriate government agency

under

Section

79

of

the

Corporation

Code

of

the

Philippines .

(i)

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 the Act or these Rules,

Provided, that the recommendation must arise directly

from the exercise of the agency's mandate to determine

any anti-competitive effect of the proposed merger or

acquisition.

SECTION 4. Consultations Preceding the Submission of

Notification. —

(a) Prior to filing a notification pursuant to this Rule,

parties to a proposed merger or acquisition that are

required to notify may inform the Commission of their

proposed

merger

or

acquisition

and

request

a

pre-notification

consultation

with

the

staff

of

the

Commission.

To request a meeting, the parties must provide the

following information in writing:

(1) the names and business contact information of the

entities concerned;

(2) the type of transaction; and

(3) the markets covered or lines of businesses by the

proposed merger or acquisition.

(b) During such pre-notification consultations, the parties

may seek non-binding advice on the specific information

that is required to be in the notification.

© Compiled by RGL

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