CreditSights, a unit of the Fitch Group, has ruled out “major hurdles” to the multibillion-peso transaction between PLDT Inc. and the Lopez Group over the acquisition of SkyCable Corp.
“We don’ anticipate any resistance from the antitrust body as the acquisition effectively involves Sky’s broadband business only, since Sky will terminate its cable TV business as part of the transaction,” CreditSights said in a report.
CreditSights said Sky has a relatively small broadband market share of 2 percent to 3 percent, which should not materially reduce industry competition post-acquisition by PLDT.
In August 2022, PLDT’s Cignal scrapped its bid to acquire a 38.9 percent stake in Sky for P2.8 billion due to concerns that the Philippine Competition Commission (PCC0 might block the deal on grounds of anti-competition.
“Such concerns mainly pertained to Sky’s cable TV business, as Cignal and Sky are the two largest cable TV providers in the Philippines with a combined market share of 63 percent to 65 percent,” CreditSights said.
According to CreditSights, the Philippine antitrust body can prevent M&As “only if they substantially lessen competition” which could include “M&As that create companies with dominant market power that could potentially lessen, restrict or prevent market competition”.
The PCC earlier said it was monitoring the proposed takeover of Sky by PLDT for P6.75 billion. The anti-trust body noted the previous acquisition plans involving PLDT and Sky were rescinded in 2020 and 2022 for various reasons, including PLDT’s own assessment then of possible overlaps with Sky in their products and services.
CreditSigths also said the acquisitions are a “logical strategic addition” to PLDT’s dominant cash-generative broadband business.
“PLDT can boost its Philippine broadband revenue market share from 2 percent to 3 percent to 47 percent to 48 percent and maintain a comfortable lead over its broadband peers, namely Globe Telecom (31 percent), Converge ICT (21 percent) and other small players (1 percent),” CreditSigths said.
“The addition of Sky’s 350k broadband subscribers would expand PLDT’s broadband subscriber base by 9 percent. Through the acquisition, PLDT eschews one of its competitors in the broadband space,” it added.
