PLDT-Digitel merger: Deal or no deal?


If PLDT will not get regulatory approval of the PLDT-Digitel merger by today, August 26, then the deal is over.

That’s according to PLDT Chairman Manny Pangilinan (MVP) who threatened last week that his company will back out of the merger talks if the Philippine government, represented by the National Telecommunications Commission (NTC), fails to come up with a decision by today.

According to Pangilinan: “We have extended that until 26 of August and if nothing would happen by that time then maybe we will just call it a day. We will just move on and Digitel can move on as well and all of this hullabaloo will just die down.”

On March 31, 2011, PLDT announced it is acquiring a 51.5% stake in the Gokongwei-owned Digital Telecommunications Phils. Inc. (Digitel). The deal involves a swap of PLDT shares with Digitel’s parent company JG Summit Holdings in a transaction valued at PHP69.2 billion.

However, without regulatory approval, PLDT and Digitel cannot close the deal.

The government apparently is calling MVP’s bluff. According to Palace spokesperson Edwin Lacierda, the NTC will most likely be unable to issue a decision this August because the agency is still studying all aspects of the transaction, including possible effects on consumers.

Critics argue that the deal might turn PLDT into a monopoly in the telecoms industry that could impact consumers through higher prices or bad service due to lack of competition. (See PLDT to kill Sun Cellular, unlimited plans?)

So assuming no approval is made today, will Manny Pangilinan stick to his earlier statement that he will not pursue the proposed merger anymore?

The current rumor is that he is seeking to back out of the merger to free up resources that he plans to use to make additional investments in mining companies, especially since gold has recently been rising to all-time high prices.

Perhaps MVP might want to ask for advice from the “Trio Tagapayo” of the TV5 show Face to Face. (Yes, that was sarcastic LOL.)

Update (August 27, 2011): PLDT released a statement saying “PLDT and JG Summit are in joint consultation as to whether the date for the finalization of the transaction shall be extended further.” It looks like MVP is not making true yet his threat to back out of the deal. The saga continues.


5 thoughts on “PLDT-Digitel merger: Deal or no deal?”

  1. Fast forward, the deal has been approved by NTC with certain approval conditions such as retaining the unlimited services of Sun Cellular and for Smart to sell some of its franchised / licensed frequencies.

    I don’t think the deal should be called a “merger” though contrary to the title of this post. This is more of an acquisition wherein Smart buys half of Sun Cell. Likewise, the two brands will stay as separate brand names in the market so they will not be merging. Though PLDT expressed interest in buying the rest of Sun Cellular. The deal makes them sister companies but not merged companies. :)

    http://bulbsandbubbles.blogspot.com/2011/10/pldt-dgtl-deal-approved-ntc-smart-sun.html

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