The Philippine Competition Commission (PCC) reminded officials of MediaQuest Holdings Inc., which operates the TV5 Network, and ABS-CBN Corp. to ensure compliance to the existing law covering mergers and acquisitions (M&A).
The PCC issued the reminder following the announcement of the two broadcast giants that they are close to finalizing their joint venture plans.
In a phone interview, PCC communications officer Penelope Endozo said they have yet to receive communication from the two parties to discuss the legalities, and whether the merger is in compliance with the Philippine Competition Act.
“The PCC trusts that firms undertaking sizable mergers or acquisitions conduct due diligence to ensure compliance with our antitrust law and engage in consultation with the Commission, where necessary,” said lawyer Johannes Bernabe, OIC chairperson of the PCC, said in a separate statement.
Further, Bernabe disclosed that the discussion should focus on M&A or joint venture transactions with a considerable share in the markets they operate in — such as the reported transaction between TV5 and ABS-CBN, two of the top media firms in the country.
“The PCC’s mandate to review transactions, whether on the basis of compulsory notification or motu proprio, remains in place to avoid the rise of new monopolies or consolidation of market power that may be detrimental to consumers,” according to Bernabe.
However, he maintained that the PCC supports the push for an enabling business environment to spur investments and partnerships amid the country’s post-pandemic recovery period.
“Still, it reminds firms to do so in compliance with the Philippine Competition Act to avoid penalties, unwinding of transactions, and ensure no substantial lessening of competition in the relevant markets,” he added.
On Thursday, MediaQuest chairperson Manuel V. Pangilinan said the decision of TV5 and ABS-CBN to form a joint venture company would allow them to strengthen and expand their existing partnership.
“We’ve been having discussions with them for over a year and it’s fair to characterize it in the close stages. The likelihood of an agreement with them is high and near,” he said.
“Approximately, we do have to get board approval as soon as we can sometime in August, maybe in the next two or three weeks. That’s broadly the timetable that we are working under,” he added.
No ownership sale
Pangilinan said the agreement would allow ABS-CBN to use the free-to-air and broadcast platform of the TV5 Network but clarified that it will not be selling its share to ABS-CBN.
“The model we are working on will be a joint venture using TV5 as the free-to-air broadcast platform of both TV5 and ABS-CBN. We are not acquiring ABS-CBN, we are not acquiring any shares in ABS-CBN. It’s them putting in money and assets into the TV5. From an equity standpoint, it will start at approximately 35 percent for them and 65 percent for Media Quest,” he explained.
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