SM acquisition of Goldilocks OKd

SM Retail has received approval from the Philippines antitrust body to acquire the Goldilocks Bakeshop chain.

This follows the two parties submitting commitments to address potential competition issues in the deal, says the Philippine Competition Commission (PCC).

SM Retail is a subsidiary of SM Investment (SMIC), which through another subsidiary, SM Prime Holdings (SMPHI), runs nearly 70 SM Malls in the Philippines. On the other hand, Goldilocks has a network of more than 500 stores, some of them in SM Malls.

Potential concerns included the possibility that retail space in SM Malls might be limited for Goldilocks’ competitors. There were also concerns SM Retail might gain access to sales information from competitors and share it with Goldilocks.

PCC chairman Arsenio Balisacan says mall owners should not be allowed to discriminate when it comes to tenants and lease applicants, “especially those that compete with stores owned by the mall itself”.

After the acquisition, Goldilocks will become a subsidiary of SM Retail.

In its voluntary commitment, which the PCC approved in December, SMPHI undertook to give Goldilocks’ competitors “a fair share in their lease at all times”.

SMPHI also committed to data protection: not to allow Goldilocks access to competing tenants’ information, including sales data captured by the POS system of SMPHI tenants.

“The commission appreciates SM’s move to make these voluntary undertakings – proof that PCC and the business community can work together to promote a culture of competition,” says Balisacan.

The SM Group is also legally bound to comply with its commitment and submit reports to the PCC. The parties will be monitored periodically by a team of PCC experts over a five-year period. This will include random inspections, says the commission.

SM Group negotiations to acquire a controlling stake in Goldilocks Bakeshop were revealed in August.i