SM Retail Inc. said Thursday it cancelled its plan to acquire bakeshop chain Goldilocks Bakeshop Inc. following the “changes in the general business environment.”
“Regarding the proposed acquisition by SM Retail of Goldilocks, both SM and Goldilocks have jointly agreed not to pursue the transaction given changes in the general business environment,” SM Investments Corp., the parent company of SM Retail, said in a statement.
Goldilocks president Richard Yee also confirmed the breakup of the deal and said it was a mutual decision by both parties not to pursue the deal.
“This was a mutual decision, which was jointly agreed upon after a friendly and productive dialogue,” Yee said.
The Philippine Competition Commission which looked into the deal said it was also informed about the cancellation of the transaction.
PCC commissioner Stella Quimbo said both parties made known their decision after considering the “commercial environment” of Goldilocks that led for both parties to refrain from the consummation of the transaction.
“It is unfortunate that it ended this way. We were actually quite pleased that they volunteered to address the concern that they have come to an agreement at a certain point. However, it is a business decision that we obviously respect,” she said.
The commission approved last month the acquisition by SM Retail of Goldilocks after the parties submitted their commitment to address potential competition issues in the transaction.
The SM Group submitted a comprehensive undertaking on Dec. 22 after a series of hearings and discussions and ultimately, the final undertaking on Dec. 28 to address the identified competition concerns.
Yee said there were changes in the business environment that compiled both parties to withdraw from the deal. “Since we first began talks with SM, so much as happened in the marketplace and many changes have occurred in our respective business environments. This caused us to re-evaluate our position, and to arrive at a decision that we feel is best for both companies,” he said.
Yee said Goldilocks would now continue focus on store expansion. “We remain focused on our plans and strategies which have allowed us to achieve double-digit growth in the past few years. We have now over 600 stores to serve our customers nationwide and we will continue this expansion in order to be more accessible to our customers,” Yee said.
SM group first made known its plan for possible investment, joint venture agreement or cooperation agreement with Goldilocks in August 2017.
The planned investment could mark the conglomerate’s foray into the restaurant business.
SM in its application with PCC assured it would not give Goldilocks access to information on competing mall tenants, including sales data captured by the POS system of SM Malls.
This was the second time that a deal to acquire Goldilocks fell through. Pancake House Inc. expressed interest in acquiring a majority stake in Goldilocks in 2005 for P2 billion.
Talks between the two parties did not proceed not all members of the Go and Yee families were open to selling their shares in Goldilocks. With Othel V. Campos