The Philippine Competition Commission (PCC) has cleared the proposed acquisition by Japan-based INFRONEER Holdings, Inc. of all shares in Sumitomo Mitsui Construction Co., Ltd., stating the transaction is unlikely to result in a substantial lessening of competition in the local construction and infrastructure sector.
INFRONEER plans to acquire Sumitomo through a public takeover bid, aiming to make it a wholly-owned subsidiary. 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. However, it currently has no operations in the Philippines.
Sumitomo, on the other hand, operates locally through its Manila Branch and SMCC Philippines, Inc. Its Manila branch operates exclusively in infrastructure projects funded through the official development assistance from the government of Japan.
In its review, the PCC found that 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.
It is also noted that INFRONEER does not have direct construction operations in the Philippines.
Because of this, the Commission concluded that the transaction is unlikely to result in a substantial lessening of competition in the local construction and infrastructure sector.
