Under the PCA, proposed mergers, acquisitions and joint ventures should satisfy the size of party test and the size of the transaction test for the merger or acquisition to be subject to compulsory notification. The size of party pertains to the computation of the aggregate value of the assets in the Philippines and revenues from sales in, into, or from the Philippines of the filing Ultimate Parent Entity (“UPE”), including all entities that it controls, directly or indirectly. Notification is compulsory if the transaction breaches the compulsory notification thresholds: the aggregate annual gross revenues in, into or from the Philippines, or value of the assets in the Philippines of the ultimate parent entity (UPE) of at least one of the acquiring or acquired entities, including that of all entities that the UPE controls, directly or indirectly, exceeds PHP6 billion (size of the party test); and the value of the transaction exceeds PHP2.4 billion (size of the transaction test). Here is your Case: HC One is the UPE of Corp One, a Philippine corporation engaged in logistics business. Corp One plans to acquire 50% of the voting shares of Corp A, a corporation incorporated in China engaged in leasing sea vessels and airplanes. HC One has PhP550,000,000 of assets in the Philippines and gross revenues of PhP4,560,000,000 from sales “in” the Philippines. Determine whether the size of the party test has been met.
Under the PCA, proposed mergers, acquisitions and joint ventures should satisfy the size of party test and the size of the transaction test for the merger or acquisition to be subject to compulsory notification. The size of party pertains to the computation of the aggregate value of the assets in the Philippines and revenues from sales in, into, or from the Philippines of the filing Ultimate Parent Entity (“UPE”), including all entities that it controls, directly or indirectly. Notification is compulsory if the transaction breaches the compulsory notification thresholds: the aggregate annual gross revenues in, into or from the Philippines, or value of the assets in the Philippines of the ultimate parent entity (UPE) of at least one of the acquiring or acquired entities, including that of all entities that the UPE controls, directly or indirectly, exceeds PHP6 billion (size of the party test); and the value of the transaction exceeds PHP2.4 billion (size of the transaction test). Here is your Case: HC One is the UPE of Corp One, a Philippine corporation engaged in logistics business. Corp One plans to acquire 50% of the voting shares of Corp A, a corporation incorporated in China engaged in leasing sea vessels and airplanes. HC One has PhP550,000,000 of assets in the Philippines and gross revenues of PhP4,560,000,000 from sales “in” the Philippines. Determine whether the size of the party test has been met.
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