PCC Case No.

M-2017-001
In the Matter of Udenna Corporation and KGL Investment Cooperatief U.A.’s Alleged
Violation of the Compulsory Notification Requirements Under Section 17 of the
Philippine Competition Commission Act and Rule 4, Section 3 of the Rules and
Regulations to Implement Republic Act No. 10667

Facts:

UDENNA CORPORATION and KGL Investment Cooperatief U.A. failed to comply with the
compulsory notification of mergers and acquisitions under the Philippine Competition
Commission Act and Rules and Regulations to Implement Republic Act No. 10667 with respect
to Udenna’s purchase of 100% of KGLI Coop’s Share through the Share Purchase Agreement.
The transaction amounted to USD 120 Million.
Udenna is a domestic holding company with registered principal office at Davao City. Its
subsidiaries are engaged in shipping, logistics, petroleum products, financial services.
KGLI Coop is a cooperative incorporated under the laws of Netherlands. KGLI Coop was the
parent company of KGLI-BV, the acquired company, which is duly organized private limited
liability company incorporated under the laws of The Netherlands. At the time of the transaction,
KGLI-BV had a 39.71% share interest in KGLI-NM Holdings, Inc., a domestic corporation.
Issue: WON the transaction breaches the notification threshold.

Held:
To sustain a finding of violation of the compulsory notification requirements under the PCA and
its IRR, the following must concur:
a. the transaction breaches the notification threshold
b. consummation of the transaction
c. failure of the merger parties to properly notify the Commission of the transaction.

Respondents do not dispute the fact that they did not notify the commission. The Respondents
also consummated the said acquisition.

Section 17 of PCA mandates compulsory notification of parties to a merger or acquisition

wherein the value of the transaction exceeds 1Billion pesos and are prohibited from
consummating their agreement until 30 days after providing notification to the commission.

There are two test:

a. Size of the person test (Section 3(a) of Rule 4)- the transaction will be covered by
1Billion threshold on the basis that Udenna as Ultimate Parent Entity (UPE) and its
subsidiaries have in the aggregate assets exceeding 1billion.
b. Size of the transaction test- the value of the transaction exceeds 1 billion computed from
the size of the proposed acquisition of voting shares (KGLI-BV had control over KGLI-
NM)

Based on the evidence and documents, the commission finds that the transaction satisfies the
size of the person test and the size of the transaction test (P 1,966,717,590.24)