MANILA -- The Philippine Competition Commission (PCC) on Thursday said it has blocked the merger between sugar miller Universal Robina Corp (URC) and its competitor, Roxas Holdings Inc.'s (RHI) Central Azucarera Don Pedro Inc (CADPI), saying the deal would lead to a monopoly.
Citing its decision issued on Tuesday, the anti-trust body said it found that URC's buyout of its lone competitor in sugarcane milling services would monopolize the business in southern Luzon.
URC's sugar mill is located in Balayan, Batangas while CADPI-RHI's milling facilities are in Nasugbu town in the same province. The PCC said the monopoly of the merger would "substantially lessen competition" not only in Batangas but also in neighboring provinces Cavite, Laguna, and Quezon.
The commission earlier raised concerns, and the parties involved voluntarily submitted commitments which "failed to sufficiently address the competition concerns," PCC said in a statement.
“The prohibition prevents this deal from creating a monopoly in the relevant market that could harm the welfare of the sugarcane planters," said PCC chairman Arsenio Balisacan.
“A merger-to-monopoly deal is among the most detrimental types of business transactions. The URC takeover removes its only competitor, erodes the benefits of competition for the sugarcane planters, and leaves market power at the hands of a single provider in an area,” Balisacan said.
Investigations also showed that farmers "stand to lose the benefits" from competition due to the merger, the PCC said.
In a statement released Thursday, the URC said it "accepts" the PCC's decision and "affirms its commitment and support to the government for a strong economy."
The decision “does not materially affect the business plans of URC," it said.
URC is engaged in food-related businesses including packed goods, beverages and agro-industrial products, while RHI operates an integrated sugarcane milling and refining plant in Batangas and is also engaged in trading raw and refined sugar and molasses.