Eagle Cement denies SMC control as competition body flags potential monopoly

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Eagle Cement says it is not under San Miguel Corporation's control despite being headed by the same tycoon, after the Philippine Competition Commission flagged potential monopoly and collusion in the cement industry.

Metro Manila (CNN Philippines, February 6) — Eagle Cement Corporation denied operating under the control of San Miguel Corporation (SMC), after a competition body flagged a potential industry monopoly due to a pending merger.

Eagle made the clarification in a statement to the Philippine Stock Exchange following competition concerns raised by the Philippine Competition Commission (PCC), the government’s antitrust body.

The company denied any involvement in SMC's plan to acquire Holcim Philippines, Inc., the country’s leading cement maker, for $2.15 billion (about ₱127 billion). The regulator flagged the deal last week, saying it could lead to a "monopoly, increased market power, and potential collusion" in the sector.

"Eagle Cement wishes to clarify that the company is not owned and controlled by the Top Frontier Group and San Miguel Corporation. Eagle is not involved in the SMC-Holcim merger deal," the listed firm said in a disclosure Wednesday.

San Miguel unit First Stronghold Cement Industries, Inc. first revealed the acquisition plan in May 2019, which will give the firm a controlling 85.73 percent stake in Holcim.

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Eagle Cement said it is the fourth largest player in the local cement industry in terms of sales, and is owned by businessman Ramon Ang — who is also president and chief operating officer of SMC and chief executive officer of its umbrella company, Top Frontier. But Eagle Cement said it is not part of the conglomerate.

The PCC said the SMC-Holcim merger would eliminate Top Frontier's only competitor in Northwest Luzon and will make it very hard for any new player to enter the cement distribution market in Greater Metro Manila, Central Luzon, and Northeast Luzon. It added that Top Frontier and its subsidiary Northern Cement Corporation use "coordinated marketing strategies" and exert influence on the board of directors of each other, which will leave the industry to a lone major player if the merger pushes through.

The competition watchdog also said it considers Northern Cement and Eagle Cement as sister firms "under common control."

Based on its 2018 annual report, Far East Cement Corporation owns 60 percent of Eagle Cement while Ang has a 26 percent stake. The remaining shares are owned by 18 individual stockholders, among them Ang's children.

SMC issued a statement last week saying it is committed to "achieving a favorable outcome of the review process," but said it believes that acquiring Holcim would be "beneficial" to consumers and to the cement industry.

Eagle Cement operates two cement sites in Bulacan and four in Cebu.