Philippine: Watchdog approves SM deal

SM Investments, the largest conglomerate in the Philippines, won regulatory approval on Tuesday, January 9, for the acquisition of a local bakeshop chain after pledging to shun anti-competitive behavior.

SM Retail’s purchase of Goldilocks Bakeshop, a chain with over 500 outlets, took four months before securing Philippine Competition Commission (PCC) approval for the takeover—a sign of tighter regulation of big business M&A activity.

SM Retail is a sister company of SM Prime Holdings, the largest mall operator in the country. It leases space to many Goldilocks outlets as well as to competitors like Red Ribbon, a subsidiary of Jollibee Foods.

PCC said that among the competition issues raised during the review was the possibility of “total and partial foreclosure.” Partial foreclosure refers to discriminatory behavior towards competitor tenants, such as less favorable locations or lease terms.

The PCC was also concerned that SM Group would have the opportunity to “share a competing mall tenant’s business information to Goldilocks,” because its malls operate a point-of-sale system that records the sales of its tenants.

Full Content: Inquirer.net

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