SM scraps Goldilocks acquisition deal

(UPDATED) SM and Goldilocks back out from the deal due to 'changes in the general business environment'

Chrisee Dela Paz

4:0:14am February 1, 2018

8:17:21am February 1, 2018

ABANDONED. The country's largest mall developer decided not to acquire shares in Goldilocks Bakeshop. Photo from Wikimedia Commons

ABANDONED. The country's largest mall developer decided not to acquire shares in Goldilocks Bakeshop. Photo from Wikimedia Commons

MANILA, Philippines (UPDATED) – SM Retail Incorporated of Philippines' richest man Henry Sy Sr has abandoned its plan to buy the country's largest bakeshop chain, Goldilocks Bakeshop Incorporated.

"Both SM and Goldilocks have jointly agreed not to pursue the transaction given changes in the general business environment," SM said in a statement on Thursday, February 1.

This was confirmed by Goldilocks president Richard Yee, who said in a statement that "changes in the marketplace" has caused the bakeshop chain and mall operator "to re-evaluate" their position and end the deal.

PCC commissioner Stella Quimbo said SM and Goldilocks informed her office this week that they will not push through with the planned acquisition, weeks after the anti-trust watchdog approved the transaction.

"They said circumstances surrounding Goldilocks obviously changed and they had to reassess the commercial aspects of the transaction in the first place," Quimbo told reporters on the sidelines of a forum in Makati City on Thursday.

"It is unfortunate that this happened but it is a business decision that we respect," she added.

Early this month, the Philippine Competition Commission (PCC) allowed the transaction to happen with several conditions: give Goldilocks' competitors a "fair chance" to secure prime locations in SM malls and not to access some specific sales data.  (READ: PCC's decision on the SM-Goldilocks acquisition)

Conditions set

SM group has "voluntarily committed" to not to give Goldilocks an access to competing mall tenants'  sales data captured by the point-of-sales system of SM tenants, whether referring to consolidated sales, product category level or prices or quantities sold.

SM also told PCC that it will not refuse Goldilocks' competitors from locating in its malls in a manner that is contrary to fair, reasonable terms or will result in foreclosure. 

The country's largest mall operator and the anti-trust watchdog agreed to these conditions, after 4 months of thorough review. (READ: SM wants to buy into Goldilocks)

When SM first filed a notice before the commission on its planned Goldilocks acquisition, PCC commissioner Johannes Bernabe said the agency had previous concerns over the transaction.

"Obviously, what was problematic there was SM was the landlord and Goldilocks, Conti's, Breadtalk, Red Ribbon, and others are tenants. Now, SM is not only a landlord, but a competitor of the other breadshops," the commissioner had explained on the sidelines of a media roundtable.

"In other jurisdictions, what has happened is the landlord tends to favor their affiliates. You will give them a good location or if there is a strong competitor, you wouldn't allow it to enter the mall or the establishment you own. We wanted to ensure that SM doesn't do that," Bernabe added. 

The PCC is the country's antitrust body. It is tasked to review business transactions valued at P1 billion or more. (READ: FAST FACTS: SM Investments Corporation)

Established in 1966, Goldilocks has grown from a small bakery in Makati City to the country's largest bakeshop with over 600 stores at home and abroad. – Rappler.com