{"id":135624,"date":"2026-04-08T11:29:16","date_gmt":"2026-04-08T11:29:16","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=135624"},"modified":"2026-04-09T09:21:01","modified_gmt":"2026-04-09T09:21:01","slug":"philippines-mergers-acquisitions","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/philippines-mergers-acquisitions\/","title":{"rendered":"Philippines: Mergers &amp; Acquisitions"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-135624","comparative_guide","type-comparative_guide","status-publish","hentry","guides-mergers-acquisitions","jurisdictions-philippines"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Angara Abello Concepcion Regala &amp; Cruz Law Offices (ACCRALAW)<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/09\/ACCRALAW-LOGO.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Angara Abello Concepcion Regala &amp; Cruz Law Offices (ACCRALAW)<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/09\/ACCRALAW-LOGO.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Mergers &amp; Acquisitions laws and regulations applicable in Philippines<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key rules\/laws relevant to M&A and who are the key regulatory authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>M&amp;A transactions in the Philippines are subject to compliance with various laws and regulations depending on the type of entities involved and the size and nature of the M&amp;A transaction. In general, the Revised Corporation Code (\u201cRCC\u201d) governs the creation, organization, and regulation of corporations in the Philippines.<\/p>\n<p>For companies with assets of at least 50 Million Pesos (or such other amount as the Securities and Exchange Commission (\u201cSEC\u201d) shall prescribe), and having 200 or more holders each holding at least 100 shares of a class of its equity securities (a \u201cPublic Company\u201d), the provisions of the Securities Regulations Code (the \u201cSRC\u201d), which is the primary securities law in the Philippines, specifically in respect of tender offers and disclosure requirements, shall apply in addition to the requirements under the RCC. Compliance with the RCC and the SRC is regulated by the SEC, and additionally, for companies with a class of securities listed for trading on an exchange (a \u201cListed Company\u201d), the rules of the Philippine Stock Exchange (the \u201cPSE\u201d) will also be relevant.<\/p>\n<p>The Philippine Competition Act (\u201cPCA\u201d) is the primary anti-trust statute in the Philippines. Under the PCA and applicable rules and regulations of the Philippine Competition Commission (\u201cPCC\u201d), the pre-acquisition ultimate parent entities of parties to a merger or acquisition which meet the notification thresholds under the law and regulations, are required to submit their notification forms and supporting documents to the PCC, and the transaction cannot close until the PCC gives its clearance, or until the relevant waiting periods under the PCA have lapsed.<\/p>\n<p>In any M&amp;A transaction, consideration must be made to foreign ownership restrictions on certain activities, such as land ownership, or activities which require minimum capitalization for foreign equity participation, such as retail trade. These foreign ownership restrictions are set forth in various laws, but are generally consolidated in a Foreign Investments Negative List, which is issued every 3-4 years. Special laws may also apply to certain industries such as banks, insurance companies, energy companies, and telecommunication companies which may impose foreign ownership restrictions and\/or require certain approvals to any M&amp;A transaction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current state of the market?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>M&amp;A activity in the Philippines remains to be active. Based on the 2024 Annual Report of the PCC, the PCC received 29 merger notifications, 17 of which were approved. These transactions held a combined value of over 809 Billion Pesos and brings the cumulative transaction value to over Six Trillion Pesos since the inception of the PCC in 2015. The above figure excludes deals which were not covered by the notification requirements under the PCA.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which market sectors have been particularly active recently?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The following sectors have been active recently:<\/p>\n<ol>\n<li>Power and energy, specifically renewable energy. The notable update on energy industry is the liberalization of solar, wind, hydro, and ocean or tidal energy generation activities to foreign investors.<\/li>\n<li>Retail. The Revised Retail Trade Law reduced the minimum paid up-capital requirement to 25 Million Pesos and the minimum investment per store to 10 Million Pesos for foreign retailers.<\/li>\n<li>Real Estate. We continue to see joint venture transactions between Filipino partners and foreign investors for real estate development in the Philippines.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What do you believe will be the three most significant factors influencing M&A activity over the next 2 years?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>We believe that the following are the three most significant factors in influencing M&amp;A activities:<\/p>\n<p><strong>1. Macroeconomics prospects \u2013<\/strong> A positive macroeconomic outlook will positively impact M&amp;A activity in the Philippines. This may result in progressive reduction in policy rates that will significantly lower borrowing costs for market participants. Lower financing expenses directly stimulate the activity of mergers and acquisitions within the market.<\/p>\n<p><strong>2. Regulatory environment \u2013<\/strong> The Philippine government has actively modified its regulatory framework to encourage corporate activity. It significantly lowered corporate income tax and offered aggressive deductions through the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE) Act. To facilitate transactions further, the PCC raised the mandatory notification thresholds to 9.1 Billion Pesos for the size of party test and 3.8 Billion Pesos for size of transaction test. This upward adjustment allows more middle-market deals to proceed without the delay of antitrust scrutiny. Combined, these regulatory and tax reforms create a highly accessible environment for mergers and acquisitions in the Philippines.<\/p>\n<p><strong>3. Political landscape &#8211;<\/strong> The current administration has actively cultivated a business-friendly climate by championing foreign investment liberalization and infrastructure development. However, the upcoming 2028 presidential election introduces a cyclical period of uncertainty into the market. Acquirers historically pause major capital deployments during election cycles to assess the policy continuity of the incoming leadership.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key means of effecting the acquisition of a publicly traded company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Acquisition of Listed Companies is usually effected through a block sale, which is a pre-arranged transaction between the parties executed through the PSE. Block sales must comply with a minimum transaction value and the allowable execution prices in accordance with the guidelines of the PSE.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What information relating to a target company is publicly available and to what extent is a target company obliged to disclose diligence related information to a potential acquirer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For private companies, the publicly available information includes the constitutional documents, such as the certificate of incorporation, articles of incorporation and by-laws, the general information sheet which provides the list of stockholders, directors, and officers, and the audited financial statements. These documents can be requested from the SEC for a minimal fee.<\/p>\n<p>In addition, the SRC requires, for issuers which have sold a class of its securities pursuant to a registration statement filed under Section 12 of the SRC, Listed Companies, or Public Companies (collectively, \u201cReporting Companies\u201d), annual and quarterly reports, and disclosure reports such as those covering material events, to be filed with the SEC, and additionally for Listed Companies, with the PSE. These reports are available for download through the company website and\/or PSE Electronic Disclosure Generation Technology (EDGE), and contain, among others, a description of the business, beneficial owners, directors and officers, and the financial statements of the company.<\/p>\n<p>The target company has no obligation to disclose due diligence related information to a potential acquirer and, if the target is a Listed Company, is generally not allowed to disclose material non-public information.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what level of detail is due diligence customarily undertaken?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A full legal due diligence is usually undertaken. This usually covers corporate matters, permits and licenses, financing, material contracts, employment, real properties, litigation, intellectual property, and data protection. Detailed diligence on financial, tax, and environment matters are also usually undertaken.<\/p>\n<p>The same level of diligence is conducted for private and public companies except that if the target is a Listed Company, the target is generally not allowed to disclose material non-public information.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key decision-making bodies within a target company and what approval rights do shareholders have?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Board of Directors (\u201cBOD\u201d) exercises the corporate powers, conducts all business, and controls all properties of a company. The BOD is entrusted with the general control and management of the business of such company and may create special committees of temporary or permanent nature and determine the members\u2019 term, composition, compensation, powers, and responsibilities.<\/p>\n<p>The by-laws define the rights and duties of the directors. Generally, the BOD may exercise all corporate powers of a company except for certain actions which require concurrence of the stockholders. Under the RCC, the following matters require concurrence of the stockholders holding at least 2\/3 of the outstanding capital stock:<\/p>\n<p>(a) Amendment of the articles of incorporation;<\/p>\n<p>(b) Delegation to the BOD the power to amend or repeal by-laws or adopt new by-laws;<\/p>\n<p>(c) Sale, lease, exchange, mortgage, pledge, or other disposition of all or substantially all of the corporate property;<\/p>\n<p>(d) Incurring, creating, or increasing bonded indebtedness;<\/p>\n<p>(e) Increase or decrease of authorized capital stock;<\/p>\n<p>(f) Merger or consolidation of the corporation with another corporation or other corporations;<\/p>\n<p>(g) Investment of corporate funds in another corporation or business in accordance with the RCC;<\/p>\n<p>(h) Dissolution of the corporation;<\/p>\n<p>(i) Extension or shortening of corporate term;<\/p>\n<p>(j) Declaration of stock dividends;<\/p>\n<p>(k) Entering into management contract if: a stockholder or stockholders representing the same interest of both the managing and the managed corporations own or control more than 1\/3 of the total outstanding capital entitled to vote of the managing corporation, or a majority of the members of the board or directors of the managing corporation also constitute a majority of the members of the board of the managed corporation; and<\/p>\n<p>(l) Removing directors from office.<\/p>\n<p>The amendment or repeal of by-laws, or the adoption of new by-laws require the concurrence of stockholders representing at least a majority of the outstanding capital stock.<\/p>\n<p>Moreover, the articles of incorporation and\/or by-laws of a company may also provide that specific actions (other than the foregoing already mentioned) will require concurrence of the stockholders.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the duties of the directors and controlling shareholders of a target company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The relationship between a company and that of its BOD is akin to that of a principal and an agent, which is by nature fiduciary in character. As such, the fiduciary character of the relationship enjoins directors to exercise a three-fold duty to the company: duty of obedience, duty of diligence, and duty of loyalty. Directors who: (a) willfully and knowingly vote for or assent to patently unlawful acts of the corporation; (b) who are guilty of gross negligence or bad faith in directing the affairs of the corporation; or (c) acquire any personal or pecuniary interest in conflict with their duty as such directors or officers, shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders and other persons.<\/p>\n<p>Controlling shareholders do not have specific duties to the target company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do employees\/other stakeholders have any specific approval, consultation or other rights?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are none under the law. Approval or consultation rights of other stakeholders may, however, be contractually required. For example, it is common practice for lenders to require borrower companies to get lender approval before certain corporate actions may be undertaken.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what degree is conditionality an accepted market feature on acquisitions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Conditionality is an accepted market feature on acquisitions. Conditions to completion include regulatory consents such as the PCC clearance, third-party consents for material contracts, and other diligence requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What steps can an acquirer of a target company take to secure deal exclusivity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Deal exclusivity is generally a contractual arrangement between the parties. This can be agreed on in a letter of intent or a memorandum of understanding prior to the signing of a definitive agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What other deal protection and costs coverage mechanisms are most frequently used by acquirers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The use of break-fee in case of termination of agreement by either the sellers or buyers has become increasingly common in M&amp;A transactions in the Philippines. Post-completion, lock-up agreements are usually put in place to maintain stability of the target company for a certain period of time.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which forms of consideration are most commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Cash is the most common form of consideration. In some cases, shares of another corporation, alone or in combination with cash, are also exchanged or swapped for the shares of the target company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">At what ownership levels by an acquirer is public disclosure required (whether acquiring a target company as a whole or a minority stake)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Any person which acquires beneficial ownership of any class of equity securities shall file \u00a0the following reports:<\/p>\n<table width=\"97%\">\n<tbody>\n<tr>\n<td width=\"21%\"><strong>Ownership Level<\/strong><\/td>\n<td width=\"78%\"><strong>Report<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"21%\">5%<\/td>\n<td width=\"78%\">Report of 5% holders of equity securities<\/p>\n<p>(SEC Form 18-A or SEC Form-AS, as applicable)<\/td>\n<\/tr>\n<tr>\n<td width=\"21%\">10%<\/td>\n<td width=\"78%\">Initial statement of beneficial ownership of securities<\/p>\n<p>(SEC Form 23-A)<\/p>\n<p>For any changes at the close of each calendar month thereafter, a statement of changes in beneficial ownership of securities (SEC Form 23-B).<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The above reports are required if the target company involved is a Reporting Company under Rule 17.2 of the 2015 Implementing Rules and Regulations of the Securities Regulation Code (\u201cSRC IRR\u201d). In addition, under the rule on mandatory tender offers, any person or group of persons acting in concert, which intends to acquire 15% of equity securities in a Public Company or a Listed Company in one or more transactions within a period of 12 months, shall file a declaration to that effect with the SEC.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">At what stage of negotiation is public disclosure required or customary?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no duty of public disclosure by the acquirer or the target company while negotiations are taking place. However, a Reporting Company under Rule 17.2 of the SRC IRR is required to make a disclosure promptly when the agreement is approved by the BOD and upon execution of the agreement\u00a0between the parties. Such companies are required to file with the SEC within ten (10) minutes after the occurrence of the event and prior to its release to the public through the news media, a current report on SEC Form 17-C to make a full, fair and accurate disclosure to the public of such material event. For Listed Companies, the same report is required to be made with the PSE.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there any maximum time period for negotiations or due diligence?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>None. This is determined by the parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there any maximum time period between announcement of a transaction and completion of a transaction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>None. Parties, however, typically agree to an \u201coutside date\u201d or a \u201clong stop date\u201d in their definitive agreements, after which either party has the right to walk away from the deal if it has not yet closed.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any circumstances where a minimum price may be set for the shares in a target company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, there is no minimum price and the price for the purchase of shares in a target company is determined by the parties. However, pursuant to mandatory tender offer requirements provided under existing regulations, if any acquisition would result in ownership of over 50% of the total outstanding equity securities of a Public Company disclosure to the public of such material event. For Listed Companies, the same report is required to be made with or a Listed Company, the acquirer shall be required to make a tender offer for all the outstanding equity securities to all remaining stockholders of the said company at a price supported by a fairness opinion provided by an independent financial advisor or equivalent third party. The acquirer in such a tender offer shall be required to accept all securities tendered. In case of take-private acquisitions, the PSE rules require the minimum tender offer price to be the higher of (i) the highest valuation based on the fairness or valuation report prepared by an independent valuation provider; or (ii) volume weighted average price of the listed security for one year immediately preceding the disclosure of the BOD\u2019s approval of the target\u2019s delisting in the PSE.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible for target companies to provide financial assistance?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, there is no prohibition for a target company to provide financial assistance to the prospective acquirer.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which governing law is customarily used on acquisitions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, the parties agree to use Philippine law if the target company is located in the Philippines. However, parties may stipulate a governing law other than Philippine law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What public-facing documentation must a buyer produce in connection with the acquisition of a listed company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Please refer to our response in No. 15 above. For the acquisition of a Public Company, the acquirer must submit the abovementioned reports to the Public Company and the SEC. For the acquisition of a Listed Company, the acquirer must submit the abovementioned reports to the Listed Company, the SEC and the PSE.<\/p>\n<p>Where the transaction requires the conduct of a mandatory tender offer, the following documentation should be prepared by the buyer:<\/p>\n<p>(a) Announcement of intention to make a tender offer in a national newspaper of general circulation;<\/p>\n<p>(b) Initial tender offer report (SEC Form 19-1);<\/p>\n<p>(c) Valuation and fairness opinion (if necessary);<\/p>\n<p>(d) Publication of the terms and conditions of the tender offer in two newspapers of general circulation; and<\/p>\n<p>(e) Report of the results of tender offer by filing an amendment of SEC Form 19-1.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What formalities are required in order to document a transfer of shares, including any local transfer taxes or duties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In general, the sale of shares is typically documented in a deed of absolute sale or assignment of shares. The sale of shares is subject to a capital gains tax (\u201cCGT\u201d) which is a 15% final tax on the net capital gains, and a documentary stamp tax (\u201cDST\u201d) of 0.75% of the par value of the shares sold. If the shares of stock sold do not have any par value, the amount of DST shall be equivalent to 50% of the DST paid upon the original issue of said stock.<\/p>\n<p>The CGT is a tax due from the seller, while the DST is usually paid by the buyer (unless otherwise stipulated by the parties).<\/p>\n<p>For Listed Companies, a similar deed of absolute sale or assignment of shares is submitted to support a block sale application to implement the sale between the parties. In lieu of the CGT, the sale is subject to a stock transaction tax (\u201cSTT\u201d) of 0.1% of the gross selling price of the shares. No DST is payable on the sale. The STT is a tax due from the seller.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are hostile acquisitions a common feature?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Hostile acquisitions are not common in the Philippines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protections do directors of a target company have against a hostile approach?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An acquirer which implements a hostile acquisition through creeping acquisitions of shares held by the public will need to comply with the mandatory tender offer requirements under applicable regulations in the Philippines. As mentioned above, if any such acquisition would result in ownership of over 50% of the total outstanding equity securities of a Public Company or Listed Company, then the price to be used for the tender offer must be supported by a fairness opinion provided by an independent financial advisor or equivalent third party.<\/p>\n<p>In addition, where the acquisition will already result in acquiring more than 35% of the voting shares (or more than 51%, if it already owns 35%), the acquirer may need to comply with the compulsory notification requirement under the PCA.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there circumstances where a buyer may have to make a mandatory or compulsory offer for a target company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under the SRC IRR, it is mandatory for any person or group of persons acting in concert to make a tender offer to all the shareholders of the target company before the intended acquisition of:<\/p>\n<p>(a) 35% of the outstanding voting shares or such outstanding voting shares that are sufficient to gain control of the board in a public company in one or more transactions within a period of 12 months;<\/p>\n<p>(b) 35% of the outstanding voting shares or such outstanding voting shares that are sufficient to gain control of the board in a public company directly from one or more stockholders; or<\/p>\n<p>(c) equity securities which would result in ownership of over 50% of the outstanding equity securities of a Public Company or Listed Company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If an acquirer does not obtain full control of a target company, what rights do minority shareholders enjoy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Minority shareholders enjoy the rights of a stockholder, such as the right to transfer or dispose of such shareholdings, right to attend shareholders\u2019 meetings, right to vote at shareholders\u2019 meetings, right to dividends, right to nominate a director, appraisal rights, right to inspect (at reasonable hours on business days) and copy corporate records, right to file derivative suits, and right to proportionately share in the remaining assets of the target company upon dissolution.<\/p>\n<p>In addition, please refer to item 8 above for corporate acts which require the approval of stockholders holding at least 2\/3 of the outstanding capital stock. Consequently, approval of the minority shareholder holding more than 1\/3 of the outstanding capital stock is required for the above corporate actions to be approved.<\/p>\n<p>In addition, under SEC Memorandum Circular No. 8-2018, all Listed Companies must obtain shareholders\u2019 approval for any change in the company\u2019s external auditor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is a mechanism available to compulsorily acquire minority stakes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no Philippine laws or regulations which allow acquirers to compulsory acquire minority stakes (i.e., \u201csqueeze out\u201d minority shareholders) after a takeover.<\/p>\n<p>However, stockholders may stipulate in the constitutive documents of a Philippine company for certain rights or restrictions over shares, such as the inclusion of drag-along rights or similar rights.<\/p>\n<p>One common practice is for a company to implement a reverse stock split whereby the par value of its shares is increased through the amendment of the articles of incorporation, which can result in fractional shares. Under the RCC, a corporation shall have the power to purchase or acquire such fractional shares, provided there is sufficient unrestricted retained earnings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3658<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/135624","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=135624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}