The Philippine Competition Commission said Tuesday it nullified the acquisition by Dennis Uy-led Chelsea Logistics Holdings Corp. of Trans-Asia Shipping Lines and imposed a P22.8-million fine for the two parties failure to notify the antitrust body about the transaction in December 2016.
The nullification of the Trans-Asia deal also led to the commission’s conditional clearance of a related transaction”•the acquisition by Chelsea Logistics Holding Corp. of KGLI-NM Holdings Inc. which in turn controls shipping and logistics company 2Go.
“Every M&A [merger and acquisition] notification subjected to PCC review is evaluated in a fair and transparent manner with the public’s welfare as foremost concern. There are sanctions for violations, there are clearances when there are no competition concerns,” said PCC chairman Arsenio Balisacan.
The latter transaction involves the acquisition by Chelsea Logistics of shares in KGLI-NM to consolidate its majority ownership in KGLI-NM and gain a 52.98-percent stake in the 2Go group.
The PCC’s investigation initially found that control of both 2Go and Trans-Asia by Chelsea would lead to a substantial lessening of competition affecting the roll-on/roll-off passenger shipping services in Cebu-Cagayan De Oro, Cagayan De Oro-Cebu, Cebu-Ozamis, Ozamis-Cebu, Cebu-Iligan and Iligan-Cebu legs and the cargo shipping services in the same areas plus the Cebu-Zamboanga leg.
It said that in these legs, 2Go and Trans-Asia operations overlapped or competed directly with each other.
The agency said with the Trans-Asia agreements out of the picture because of the nullification order, the overlaps with 2Go in the six legs of passenger shipping services and six areas in cargo shipping services in Visayas and Mindanao which were found earlier in the commission’s statements of concerns were now ruled out.
The PCC, in two separate decisions dated June 28, ordered Trans-Asia Shipping to inform the antitrust commission within 30 days from execution of merger or acquisition agreements involving any of its shares after the nullification order.
It aid if Chelsea Logistics’ parent entity Udenna Corp. or any of its subsidiaries/affiliates pursued the purchase or re-executed the voided Trans-Asia deal, the parties should notify the transaction to the PCC regardless of whether it is notifiable under the mandatory notification regime of the Philippine Competition Act.
Chelsea is a wholly-owned subsidiary of Udenna Corp. with stakes in maritime trade and shipping transport. Meanwhile, Trans-Asia is a domestic shipping company, transporting both passengers and cargoes.