The Philippine Competition Commission (PCC) has found no competition concerns in the proposed joint ventures between Prime Infrastructure Capital, Inc. (Prime Infrastructure) and First Gen Corporation, following a Phase 1 review of the interconnected energy markets.
The deal involves Prime Infrastructure’s acquisition of majority stakes in seven holding companies under First Gen, which collectively own indirect interests in several gas-fired power plants, including Santa Rita, San Lorenzo, San Gabriel, Avion, and the planned Santa Maria facility, as well as a liquefied natural gas (LNG) terminal facility in Batangas.
Prime Infrastructure, which is part of Razon & Co. Inc., is primarily engaged in infrastructure development, including energy, water, and construction. Through its subsidiaries—Prime Energy Resources Development B.V. and Prime Oil and Gas, Inc.—it holds a 45% stake in the Service Contract 38 Consortium that operates the Malampaya Gas Field. First Gen, a subsidiary of Lopez, Inc., operates a wide range of energy facilities, including geothermal, hydro, wind, solar, and natural gas power plants.
The PCC’s Mergers and Acquisitions Office assessed both horizontal and vertical markets, finding that the transaction is unlikely to substantially lessen competition. In the renewable energy generation market, while the combined entity would become the largest player, the increase in market share is minimal, and the market remains highly competitive, with many existing and potential players continuing to exert competitive pressure. Similarly, in the retail electricity supply market, the combined share of the parties remains well below that of major players, and the ability for customers to easily switch suppliers, along with a variety of licensed suppliers, ensures continued competition.
In the vertical markets, the Commission found that there was no ability or incentive for the parties to engage in foreclosure strategies. The assessment also took into account the fact that market fragmentation, competitive dynamics, and regulatory safeguards help mitigate potential risks in these sectors.
This decision reflects the PCC’s case-by-case approach to merger reviews. In December 2024, the Commission imposed behavioral conditions on a joint acquisition involving LNG and power assets by Meralco PowerGen Corp., Therma NatGas Power Inc., and San Miguel Global Power Holdings Corp., due to identified risks of coordination and foreclosure. However, no such concerns were found in this transaction, with the PCC citing factors such as significant competition, the absence of foreclosure incentives, and market safeguards.
The PCC emphasized that the findings underscore its role as a steward of competitive integrity, particularly in sectors that are critical to national development. As strategic energy assets continue to undergo consolidation, the Commission remains committed to upholding competition, transparency, and consumer welfare.