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- Merger Screening
1. What type of transactions are caught by the merger control regime?
1.1.1 Type of transactions that are caught by the merger control rules?
The following transactions are subject to merger control when:
- two or more previously independent undertakings merge;
- one or more persons or undertakings acquire direct or indirect control of the whole or part of one or more other undertakings; or
- the result of an acquisition by one undertaking of the assets (including intangible), or a substantial part of the assets, of another undertaking is to place the first undertaking in a position to replace or substantially replace the second undertaking in the business or, as appropriate, the part concerned of the business in which that undertaking was engaged immediately before the acquisition.
The following transactions are exempt from merger control:
- the person acquiring control is a receiver or liquidator acting as such or is an underwriter acting as such;
- all the undertakings involved in the transaction are, directly or indirectly, under the control of the same undertaking;
- control is acquired solely as a result of a testamentary disposition, intestacy or the right of survivorship under a joint tenancy; or
- dealings by securities dealers for its own account or for the account of others under the circumstances set out in the Competition Act.
Further, the following transactions are exempt from merger control:
- the economic efficiencies arising or that may arise from the transaction outweigh the adverse effects of the substantial lessening of competition in the relevant markets in Singapore;
- transactions approved by any minister or any regulatory authority as required under sector-specific law.
1.3 Definition of "control"
1.3.1 How are the concepts of "control" and "change of control" defined?
An undertaking “controls” another undertaking if, by means of rights, contracts or any other means it can yield “decisive influence” with regard to the activities of the undertaking and, in particular, by:
- ownership of, or the right to use all or part of, the assets of an undertaking; or
- rights or contracts that enable decisive influence to be exercised with regard to the composition, voting or decisions of the organs of an undertaking.
The Competition and Consumer Commission of Singapore has outlined the following “indications” of control: It considers that decisive influence is generally deemed to exist if there is ownership of more than 50% of the voting rights. If the ownership of voting rights is between 30 - 50%, there is a rebuttable presumption that decisive influence exists.
2. Establishing jurisdiction for notification of mergers
2.3 General thresholds
There are no jurisdictional thresholds in Singapore and no obligation to notify a concentration. The competition act prohibits transactions that would have the effect of substantially lessening competition in a Singapore market. The Competition and Consumer Commission of Singapore (CCCS) may investigate a transaction or anticipated transaction on its own initiative. The CCCS has powers to decide if a concentration is unlawful and can impose remedies and penalties.
The undertakings concerned may seek clearance from the CCCS under the voluntary pre-notification regime. A transaction is unlikely to raise competition concerns and investigation by the CCCS if it falls below the below thresholds:
- the undertakings concerned have a combined market share of less than 40%; or
- where the three businesses in the market with the largest market shares have a combined market share (post-merger) of 70% or more, the undertakings concerned have a combined market share of less than 20%.
The CCCS may investigate the transaction whether the thresholds are met or not. Market concentration is only one of the various factors used in assessing a transaction.
The CCCS has stated that it is unlikely to investigate transactions involving only “small” companies, i.e. where the turnover of each of the undertakings concerned was below SGD 5,000,000 in Singapore in the last financial year and the combined turnover of the undertakings concerned was below SGD 50,000,000 globally in the financial year.
2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)
Some sectors and industries require separate approval by their regulatory authority, e.g. media, telecommunications, energy, postal and postcard, potable piped water, wastewater management services, licensed and regulated bus services, railway, industries and licensed and regulated cargo terminal operations.
2.5 Foreign-to-foreign mergers
2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?
Singapore does not prohibit foreign investment.
and last updated on 18-01-2021 by
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