Senate backs PLDT-Digitel takeover plan
24 Aug 2011
A Philippines’ Senate committee yesterday approved Philippine Long Distance Telephone Company (PLDT’s) plan to acquire a majority stake in rival operator Digitel Telecommunications Philippines Inc (Digitel) for around PHP70 billion, adjudging the deal to be ‘consistent with its legislative franchise and in the interest of the public’. In a twelve-page report, the committee concluded that the merger constitutes part of the normal course of action between two businesses in the local telecoms industry. Committee chairman Senator Ramon Revilla, Jr said: ‘[The committee] is of the view that the proposed acquisition by PLDT of a controlling interest in Digitel (Sun Cellular) is consistent with, and not in violation of [the said legislative franchises].’ The document went on to note that even one of the most vociferous opponents of the plan – Globe Telecom – had admitted it was legal. ‘It is apparent that the PLDT-Digitel transaction is no different in form and substance from Globe’s acquisition of Isla Communications way back in the year 2001,’ the report states. Further, concerning the issue that the PLDT-Digitel merger breaches local laws on monopolies and cartels, the report found that ‘there is effectively no comprehensive anti-trust legislation in the Philippines’, adding that existing laws are ‘confined to prohibiting combinations, arrangements and practices in restraint of trade’. In conclusion the committee effectively dismissed the detractors noting that ‘the fear raised by various parties that the share-swap deal is against public interest and consumer welfare is premature and unfounded at this time’.