PCC to commence review of Ayala’s acquisition of Generika Drugstore

The Philippine Competition Commission has announced a thorough review of the proposed purchase of Generika Drugstore by AHCHI Pharma Ventures Inc. (Ayala Pharma Ventures) due to potential competition concerns.

Last December 2023, Ayala’s healthcare unit acquired a minority stake in the listed pharmaceutical company St. Joseph Drug.

Ayala Corp. said that AC Health’s pharmaceutical arm, AHCHI Pharma Ventures Inc. (APV), signed definitive agreements with St. Joseph Drug (Joleco Resources Inc.) on 15 December for the acquisition of a “significant” minority stake.

AHCHI Pharma Ventures Inc. (Ayala Pharma Ventures), which operates Generika Drugstore; and Joleco Resources Inc., which operates St. Joseph Drugstore, notified the PCC last 13 January of their proposed transaction, which would involve Ayala Pharma Ventures acquiring a 49-percent stake in Joleco Resources.

Based on the initial data-gathering by the PCC Mergers and Acquisitions Office under its Phase 1 review pointed to potential competition concerns in retailing pharmaceutical and non-pharmaceutical products across 28 Northern Luzon locations.

These localities span the Ilocos Region and Cordillera Administrative Region, the PCC said.

With this, the MAO recommended opening a Phase 2 review, which entails conducting a more detailed and extensive assessment of whether the transaction may substantially lower competition in the relevant markets.

Under the Philippine Competition Act of 2015, the PCC is mandated to review mergers or acquisitions to ensure that these deals will not substantially lessen competition in the relevant markets and harm consumer welfare.