A Philippines court upheld the legality of the PHP69.1 billion ($1.4 billion) joint acquisition of San Miguel Corp’s (SMC) telecoms assets by PLDT and Globe Telecom.
The Court of Appeals approved a petition by the two operators requesting a halt to a Philippine Competition Commission (PCC) investigation of the acquisition, The Philippine Star reported. The decision formally stops the antitrust body’s efforts to review the deal, which was signed in May 2016.
In making its decision, the court rejected PCC’s argument a pre-acquisition review was necessary to determine the potential impact of the transaction on public welfare. The court added the agency “committed grave abuse of discretion” when it did not follow its own rules when the deal was announced, the newspaper said.
The decision stated the National Telecommunications Commission, not PCC, has the authority and technical expertise to investigate the deal.
In June PCC criticised PLDT and Globe for attempting to pre-empt pending court rulings after the pair made the final payment to complete the acquisition of SMC’s telecoms assets.
PCC’s attempts to review the deal were blocked by the courts after PLDT and Globe filed for temporary restraining orders in July 2016. PCC issued a statement in late August 2016 warning the deal is “likely” to negatively impact competition.
PLDT’s mobile unit Smart and Globe, which control 99 per cent of the county’s mobile connections, teamed up to make the 50:50 joint purchase. Before the acquisition, SMC was considering launching a third mobile operation in partnership with Australia’s Telstra to inject some much needed competition into the market.
Amid calls for more competition, Philippines’ president Rodrigo Duterte in October 2016 warned the country’s two dominant mobile operators he would open the market to Chinese competition if they fail to improve their poor service.