Recognizing the predicament faced by the energy industry in supplying steady power to communities across the Philippines to support the business and build a strong economy, the Philippine Competition Commission (PCC) has approved the joint acquisition of power facilities and a liquefied natural gas (LNG) terminal by Meralco PowerGen Corp. (MGEN), Therma Natgas Power Inc. (Therma) of Aboitiz Power Corporation (AboitizPower) and San Miguel Global Power Holdings Corp. (SMGP). The deal, considered critical for strengthening the country’s energy supply, is subject to conditions aimed at ensuring fair competition and promoting transparency.
The transaction involves MGEN and Therma, through their joint venture Chromite Gas Holdings Inc. (Chromite), acquiring a 67% equity interest in South Premiere Power Corp. (SPPC), Excellent Energy Resources Inc. (EERI), and Ilijan Primeline Industrial Estate Corp. In addition, MGEN and Therma, through Chromite, along with San Miguel Power, will jointly acquire 100% of Linseed Field Corp. (LFC), which operates the LNG terminal in Batangas City. As a result of these acquisitions, MGEN and Therma, through their 60/40 ownership of Chromite, will control 67% of SPPC, EERI, and Ilijan Primeline, while San Miguel Power retains a 33% stake in these three entities and gains a corresponding interest in LFC.
The PCC emphasized that while the transaction supports the country’s energy security, the imposed conditions on the deal are vital to maintaining a competitive market. Key safeguards include PCC oversight of the Competitive Selection Process (CSP) to ensure power supply agreements are awarded through a transparent and competitive bidding process. The acquired companies must also operate independently of their parent companies, with strict measures to separate IT systems, offices, and management to prevent coordination or undue influence. Boards of directors will include independent members, and internal trading units will operate independently of affiliates.
To promote transparency, power plants must submit reports on unplanned outages to the PCC within seven days of reporting to the DOE. Additionally, Competitive Retail Electricity Market (CREM) reports must also be shared with the PCC. The parent companies are also required to appoint a competition compliance officer to monitor the fulfillment of these commitments. The PCC will communicate to DOE and ERC the conditions imposed, as well as coordinate on the alignment of existing guidelines and policies with competition law and policy to curb competition concerns that may arise from similar transactions.
The conditions will remain in effect for five years, with possible extensions depending on market conditions. Violations could result in daily fines of up to PHP 2 million per infraction, until the entity fully complies, in addition to other penalties and sanctions.
The PCC noted that these safeguards strike a balance between encouraging investments in critical energy infrastructure and ensuring a fair and competitive market that benefits consumers, businesses, and the broader economy. By addressing potential competition issues while supporting energy security, the approved transaction represents a key step toward bolstering the Philippines’ energy landscape.
In their joint statement MGEN, AboitizPower, SMGP welcomed the decision of the PCC, saying the landmark transaction is expected to boost the country’s energy security and infrastructure.
The companies expressed their appreciation for the PCC’s thorough review process and affirmed their shared commitment to advancing a competitive energy market that delivers real benefits to Filipino consumers.
In addition, they emphasized their commitment to full compliance with all regulatory requirements and pledged to collaborate closely with stakeholders to align their efforts with the government’s energy goals.This partnership highlights the shared vision of MGEN, AboitizPower, and SMGP to address the growing energy needs of the Philippines while promoting transparency, fairness, and long-term sustainability in the energy sector.
