PCC Case No. M-2018-003 (MAO Case No.

3/2017)

In the Matter of Udenna Corporation, Chelsea Logistics Holdings Corporation, and Trans-
Asia Shipping Lines, Inc’s Alleged Violation of the Compulsory Notification
Requirements Under Section 17 of the Philippine Competition Act and Rule 4, Section 3
of the Rules and Regulations to Implement Republic Act No. 10667

Udenna Corporation, Chelsea Logistics Holdings Corporation, and Trans-Asia Shipping

Lines, Inc

Facts:

Chelsea, acquiring company, is an entity incorporated under the laws of the Philippines.
Through its subsidiaries, Clesea is engaged in the business of maritime trade. It is wholly owned
subsidiary of Udenna, a domestic holding company with principal address at Davao City, whose
subsidiaries are engage in the distribution and retail of petroleum products.

Trans-Asia, acquired company, is also an entity incorporated under the laws of the Philippines.
It is primarily engaged in domestic shipping and by transporting passengers and cargoes within
the Philippines.

On 12 December 2016, Chelsea Logistics Holdings Corporation ("Chelsea") and Trans‐Asia

Shipping Lines, Inc. ("Trans‐Asia") entered into several deeds of absolute sale of shares
whereby Chelsea acquired of 100% of the shares in Trans‐Asia, for a total consideration of
PhP205,366,987.00.

The Mergers and Acquisition Office initiated a fact‐finding inquiry on the transaction, with MAO
sending a letter to explain to each of the respondents on 12 October 2017. Conferences and
submissions ensued. On 26 June 2018, the case was submitted for decision by the
Commission.

Issue: WON the transaction breached the notification threshold and violated the notification
requirement.

Held:

To sustain a finding of violation of the compulsory notification requirements under the PCA and
its IRR, the following elements must concur:
Elements:
(i) The transaction breached the notification thresholds
Size of the Person Test- when the aggregate annual gross revenues in, into and
from the Philippines, or value of the assets in the Philippines of the ultimate parent
entity of at least one of the acquiring or acquired entities, including all the entities that
the ultimate parent entity controls, directly or indirectly exceeds 1 billion pesos.

UPE of Chelsea is Udenna with over 1billion total assets and revenues
(30,737,315,934)
 Size of the transaction test- requires that the value of the transaction exceeds 1
billion pesos: (i) aggregate value of assets in the Philippines that are owned by the
corporation or non-corporate entity or by entities it control (ii) gross revenue from
sales in, into and from the Philippines (iii) the entity acquiring shares would own a
voting shares of the corporation at least 35% or 50%

The purchase price is not the basis for determining WON the transaction is notifiable.
It is the value of the transaction as purchase price may be increase or decrease
subject to the discretion of the parties.

Aggregate value of asset or gross assets or total assets is the total resource
controlled by the entity as a result of past events and from which future economic
benefits are expected to flow to the entity.

The value of the transaction exceeds 1billion. (1,142,700,772)

(ii) Consummation of the transaction

Records show that the respondents already consummated the transaction through
several deeds of absolute sales of shares dated December 12, 2016

(iii) 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