Manila, Philippines — The Philippine Competition Commission (PCC) has approved the proposed merger between two non-life insurers, FPG Insurance Co. Inc. and The Mercantile Insurance Company, Inc., after concluding that the transaction is unlikely to lessen competition in the insurance market substantially.
While the transaction was notified to the PCC on November 19 last year, the terms of the merger will remain, with Mercantile Insurance as the surviving entity, and will be renamed as FPG Mercantile.
Both companies operate in the non-life insurance segment, with Mercantile Insurance offering products covering health, accident, fire, and allied lines, motor vehicle, casualty, marine, cargo, marine hull, comprehensive liability insurance, and allied risks. Meanwhile, FPG Insurance’s portfolio includes fire and allied perils, motor, casualty, marine, medical, personal accident, engineering, surety, and bonds.
Moreover, the PCC’s Mergers and Acquisitions Office reviewed the deal’s potential impact on competition in the nationwide provision of aviation, fire, marine, motor car, casualty, engineering, personal accident, and suretyship non-life insurance, as well as the global provision of reinsurance for the same product categories. The review involved interviews with the parties and third parties to assess market structure and competitive dynamics.
According to the PCC, the review found that the combined entity’s market shares would remain low across the relevant markets, limiting its ability to influence market conditions or engage in foreclosure strategies.
The presence of several other competitors was also cited as providing sufficient competitive constraint on the merged company. The clearance allows the merger to proceed, with the PCC stating that competition in the relevant insurance markets is expected to be preserved following the transaction.
