The Philippine Competition Commission (PCC) said it has issued a Statement of Concerns (SOC) to the parties involved in the planned acquisition of Goldilocks Bakeshop, Inc., the country’s largest bakeshop chain, by Sy-led SM Investments Corp. (SMIC).
In a media briefing Tuesday, PCC Commissioner Stella Luz Quimbo, said the anti-trust body issued SOC last week and the parties are due to comment by December 14.
“The potential concern has to do with how SM will relate with the competitors of Goldilocks, for example, Red Ribbon and other bakeries,” Quimbo said.
She added that the PCC has pointed out in its SOC all its concerns regarding the deal such as SM’s ability to foreclose Goldilocks’ competitors and the incentive, particularly in terms of increasing profits, when it totally or partially foreclosed other players in the cakes and pastries sector with SM’s planned acquisition of the bakeshop chain.
In this case, total market foreclosure means other bakeshop chains are barred to do their business in SM malls, while partial market foreclosure would mean allowing other players to be tenants of the mall but their location would be in a competitive disadvantage compared to Goldilocks’ spot.
Last August, SMIC told the Philippine Stock Exchange that the company has preliminary discussion with Goldilocks for “possible equity investment, joint venture, or other cooperation agreement”.
But it noted that the deal is still pending and subject to the approval of the PCC.
“They are well-aware of what we think what could be the competition problems,” said Quimbo.
“And we have also provided guidance on how they can proceed; meaning, providing them specific guidelines on the kind of commitments they can propose and what are the acceptable to the PCC,” the Commissioner added.
Quimbo said that the involved parties could provide PCC with comments on the SOC, which the Commission would take into consideration when it would finally decide on the deal whether to approve it or to approve it with conditions.
She also said the companies could submit voluntary commitments in which PCC has provided certain guidelines.
Cebu Landmasters Eyes P7-B Reservation Sales This Year
Listed property developer Cebu Landmasters Inc. (CLI) targets to hit Php7 billion in reservation sales this year, up 52 percent from Php4.58 billion posted last year.
CLI attributed its exceptional performance last year mainly to newly-launched residential projects, which are now almost fully sold.
“In 2018, we will continue to expand our footprint in the Visayas and Mindanao, and develop projects that respond to the growing market in these areas,” CLI chief executive officer Jose Soberano III told the local bourse.
The company will launch this year 20 new developments, among them two residential subdivisions, three residential condominiums, three offices, one hotel and one industrial park in Cebu; two residential condominiums and a hotel in Bacolod; and a residential condo in Iloilo.
It also plans to fortify its foothold in Mindanao where it will launch two residential subdivisions and one residential condominium in Cagayan de Oro, while a central business district and two residential condominiums will be unveiled in Davao.
The upcoming projects boost CLI’s total number of projects to 66 from 46 last year, as it continues to strengthen its brand in its niche markets.
Soberano is confident of meeting performance targets set for the year and beyond.
The company targeted to book Php1.7 billion in profit and Php5.3 billion in revenue in 2018.
It expects that hikes in household income resulting from the newly approved package 1 of the Duterte government’s Tax Reform for Acceleration and Inclusion (TRAIN) law will be channeled to housing.
CLI said government spending in infrastructure was also expected to unlock land values outside Metro Manila and stimulate business in the countryside.
IKEA to Announce Opening Date This Year
Swedish furniture company IKEA was planning to announce targeted opening date in the Philippines within the year, IKEA Sustainability and Communication Director Lars Svensson said Wednesday.
In an interview on the sidelines of Responsible Business conference in Makati, Swedish Ambassador Harald Fries said IKEA was planning to open its first Philippine store early 2020.
Asked about this, Svensson neither denied nor confirmed saying “until (they) have everything firmed up, that’s when (they’ll) announce the date of opening.“
“I can say that within this year, we’ll announce it,” he said, explaining they were concealing it for the meantime so as to avoid influencing property prices.
“It’s just that it is an aspect of not fuelling speculation because the size of the company and the size of the brand equates to the interest, that’s a positive thing for us but we do not want to drive speculation where we’re going to be influencing property prices etc.,” he said.
“Absolutely, it is no secret we’re eyeing the Philippines to open next IKEA,” he added.
Svensson said they were highly optimistic about “the maturity and the development” of the Philippine economy. “We really believe it’s a place that is ready in terms of capacity and industry that could support.”
Cebu Landmasters Ends 2017 With Record P4.58-B Reservation Sales, Plans 20 New Developments in 2018
Homegrown property developer Cebu Landmasters Inc. (CLI) finished the year 2017 with P4.58 billion in total reservation sales, exceeding its target by 13.75 percent and beating the 2016 result by 55.6 percent.
CLI attributed its exceptional performance mainly to newly launched residential projects: 38 Park Avenue (Cebu IT Park) with 745 units, Casa Mira South (Cebu) with 3,200 units, Mivesa Garden Residences (Cebu) with 1,514 units, Mesaverte (Cagayan de Oro) with 798 units, and the 694-unit MesaTierra (Davao City). These projects are now almost fully sold.
The listed company said its sales performance is resounding affirmation that its products respond to the needs of the market and are distributed strategically to the areas where demand is strongest.
“All the projects we launched were well-received by their respective markets making 2017 another banner year,” said CLI chief executive officer Jose Soberano III referring to the firm’s efforts to penetrate new markets such as Davao and Dumaguete and to diversify its products.
The past year saw CLI aggressively venturing into the hospitality industry to increase its inventory to a total of 610 rooms in four years. All CLI hotel projects are located within company-developed mixed-use communities. The 180-room “lyf Cebu City” by Ascott targeting millennial travelers and the 250-room Citadines Riverside Davao were launched in late 2017. They will complement Citadines Cebu City set for completion in 2018. More hotel projects are expected to break ground in 2018.
Cebu Landmasters is confident it will gain even greater momentum this year. The company has targeted reservations sales to hit P7 billion this2018, a massive 52-percent hike from the previous year, as it starts more projects and expands to more territories in Visayas-Mindanao growth centers.
The array of new developments planned for the year include 10 in Cebu (two residential subdivisions, three residential condominiums, three offices, one hotel and one industrial park). Details of these projects will be revealed in the coming months.
CLI has also set its sights on two new territories in the Visayas. Bacolod will play host to two residential condominiums and a hotel, while a residential condo is planned for neighboring Iloilo. Reports from the National Economic Development Authority (NEDA) show that the Visayas region will zoom ahead of other regions in the next five years and is expected to outpace the projected 7 to 8 percent growth for the Philippines.
The listed property developer also plans to fortify its foothold in Mindanao where it will launch two residential subdivisions and one residential condominium in Cagayan de Oro while a central business district and two residential condominiums will be unveiled in Davao. NEDA reports that in terms of economic growth, Davao ranks third among 18 regions in the country.
The upcoming projects boost CLI’s total number of projects to 66 from 46 last year, as it continues to strengthen its brand in its niche markets. The company’s residential condominiums are mostly designed for the mid-market segment, although it also offers condos for the high-end market.
“In 2018, we will continue to expand our footprint in the Visayas and Mindanao, and develop projects that respond to the growing market in these areas,” said Soberano who is confident CLI will meet its performance targets set for the year and beyond.
It expects that hikes in household income resulting from the newly approved package 1 of the Duterte government’s Tax Reform for Acceleration and Inclusion (TRAIN) will be channeled to housing.
Studies (TUCP, 2010) have also shown that around 2 to 2.1 percent of OFW remittances are channeled to housing. Total remittances in 2017 were seen to hit US$33 billion (World Bank, 2017). This means that at least US$693 million or about P35 billion would be used for shelter requirements.
CLI also expects that government spending in infrastructure will unlock land values outside Metro Manila and stimulate business in the countryside as the Duterte administration pushes for investments outside of the country’s capital.
Ferrero to Acquire Nestle’s U.S. Confectionary Business
The Ferrero Group and its affiliated companies (“Ferrero”), a global confectionary group, announced a definitive agreement pursuant to which it will acquire the U.S. confectionary business from Nestle for $2.8 billion in cash. Nestle’s U.S. confectionary business generated sales of approximately $900 million in 2016.
Ferrero will acquire more than 20 American brands with a rich heritage and strong awareness, including iconic chocolate brands such as Butterfinger®, BabyRuth®, 100Grand®, Raisinets®, Wonka® and the exclusive right to the Crunch® brand for confectionary and certain categories in the U.S., as well as sugar brands such as SweeTarts®, LaffyTaffy®, and Nerds®.
With this transaction, Ferrero will become the third-largest confectionary company in the U.S. market where it is best known for Tic Tac® breath mints, Ferrero Rocher® pralines, Nutella® hazelnut spreads, the Fannie May and Harry London chocolate brands, and the Ferrara Candy Company, which was recently acquired by a Ferrero affiliated company and whose portfolio of brands includes Trolli®, Brach’s® and Black Forest® Gummies.
Ferrero will acquire Nestle’s U.S. manufacturing facilities in Bloomington, Franklin Park and Itasca, Illinois, and the confectionary-related employees, and will continue to operate through the offices in Glendale, California, as well as from its other current locations in Illinois and in New Jersey.
Giovanni Ferrero, Executive Chairman of the Ferrero Group, said, “We are very excited about the acquisition of Nestle’s U.S. confectionary business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness. In combination with Ferrero’s existing U.S. presence, including the recently acquired Fannie May Confections Brands and the Ferrara Candy Company, we will have substantially greater scale, a broader offering of high-quality products to customers across the chocolate snack, sugar confectionary and seasonal categories, and exciting new growth opportunities in the world’s largest confectionary market. We look forward to welcoming the talented team from Nestle to Ferrero and to continuing to invest in and grow all of our products and brands in this key strategic and attractive market.”
“Our commitment to deliver value to the North American consumers and customers will be strongly enhanced by the arrival in our portfolio of such powerful confectionary and chocolate brands,” said Lapo Civiletti, CEO of the Ferrero Group.
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close around the end of the first quarter of 2018.
Credit Suisse Securities, Davis Polk and Wardwell LLP and Lazard served as advisors to Ferrero. (Ferrero)
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