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PCC okays buy of Frabelle stake

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By Bernie Cahiles-Magkilat

The Philippine Competition Commission (PCC) has approved the acquisition by Johnsonville International, LLC of shares in Frabelle Corporation, saying the transaction does not lead to substantial lessening of competition in the sausage and hotdog business.

Philippine Competition Commission

Philippine Competition Commission

The transaction covers the purchase of shares by Johnsonville International, LLC of 51 percent of the issued and outstanding capital stock in Frabelle Corporation.

Johnsonville International, LLC, the acquiring entity, is a US company engaged in the manufacturing, packaging, and distribution of fresh, chilled and frozen meat products, most notably of sausages in Philippine stores under the brand name of “Johnsonville.”

Frabelle Corporation, the acquired party, is a Philippine company engaged in manufacturing, packaging, and distribution of fresh, chilled and frozen processed meat products, including hotdogs and sausages under the brand name “Frabelle.”

In a Commission Decision on May 7, the PCC also found that Frabelle’s volume in the sausage market is negligible, such that even if combined with the pre-existing production volume of Johnsonville, this will not or is not likely to result in a significant change in market structure.

The PCC also noted that the resulting change in the market shares of the Parties in the market for hotdogs and sausages is minimal. As both firms also deal with cold storage warehousing, the transaction was found to have no ability or incentive to engage in input or customer foreclosure in the market for cold storage in the Caloocan, Malabon, Navotas, and Valenzuela (CAMANAVA) area.

PCC, the country’s anti-trust body, is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not harm the interest of consumers.

To date, PCC has received 182 merger transactions by local and international companies, approved 169 of them and blocked 1 anti-competitive merger. The transactions have registered a combined worth of P2.84 trillion in terms of transaction value.

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