Manila: The Philippine Competition Commission (PCC) announced on Wednesday that the proposed joint venture between Prime Infrastructure Capital Inc. and First Gen Corporation is not anticipated to reduce competition in the energy sector.

According to Philippines News Agency, the PCC's Phase 1 review results indicated that the Mergers and Acquisitions Office examined two horizontal and four vertical markets, concluding that the transaction is unlikely to substantially decrease competition in any identified markets. The joint venture agreement involves Prime Infrastructure acquiring a majority stake in seven holding companies under the Lopez-owned First Gen. These holdings include stakes in several gas-fired power plants such as Santa Rita, San Lorenzo, San Gabriel, Avion, and the planned Santa Maria facility, as well as the liquefied natural gas terminal in Batangas.

Prime Infrastructure, a subsidiary of Razon and Co. Inc., is engaged in infrastructure development and investment. It holds around 45 percent interest in the Service Contract 38 Consortium operating the Malampaya Gas Field through its subsidiaries Prime Energy Resources Development B.V. and Prime Oil and Gas, Inc.

The PCC stated that post-transaction, the firms will become the largest entity in the renewable energy sector. However, the market will remain unconcentrated and subject to competitive constraints from numerous existing and prospective players. In the retail electricity supply market, the combined market share of the parties will remain significantly below that of major players. Customer switching and the presence of multiple licensed suppliers will continue to preserve competition.

The Commission also found no ability or incentive for the parties to engage in foreclosure strategies in the vertical markets.