SINGAPOREAN UPDATE – Competition Commission of Singapore Amends Merger Guidelines


  • The Competition Commission of Singapore (“CCS”) has published its revised Guidelines on Merger Procedures 2012 and they came into effect on 1 July 2012.
  • The changes provide further guidance to parties on determining whether a merger is likely to result in a substantial lessening of competition.
  • They also set out a new procedure for obtaining the CCS’s confidential advice on the proposed merger, and also explain the CCS’s approach to market intelligence and how confidential information provided to it will be treated.

Main Article:

The Competition Commission of Singapore (“CCS”) has published its revised Guidelines on Merger Procedures 2012 (“2012 Guidelines”). They came into effect on 1 July 2012. The CCS first issued a consultation paper on 20 February 2012 (“Consultation Paper”) seeking feedback on proposed changes to the Guidelines on Merger Procedures. Following the feedback, the CCS modified some of its proposed changes. However, the main changes proposed in the consultation paper remain substantially the same. The changes effected by the 2012 Guidelines are discussed below.

Self-Assessment of a SLC

Given that the merger notification regime in Singapore is a voluntary one, parties to a proposed merger have to determine whether there is a risk of the merger being prohibited under section 54 of the Competition Act for causing a substantial lessening of competition (“SLC”) in the relevant market. In this regard, the 2012 Guidelines provides further guidance to smaller companies by stating that a merger is unlikely to be investigated by the CCS if:

  • It involves companies with turnover in Singapore of less than S$5 million; and
  • The combined worldwide turnover of the merger parties is less than S$50 million.

This guidance differs slightly from that proposed in the Consultation Paper in the following ways:

  • The CCS has suggested that, for the purpose of a self-assessment as to whether the merger is one that results in a SLC, parties use a rule-of-thumb based on their respective shares of supply. This suggestion has not been incorporated into the 2012 Guidelines which retain the market share test for self-assessment.
  • Also as regards parties’ self-assessment of their merger, the CCS had proposed stating that a merger of small companies would ordinarily not result in a SLC. It had further proposed that a company would be considered small if, in the financial year preceding the transaction, it had a turnover in Singapore below S$5 million, and a turnover worldwide below S$10 million. The 2012 Guidelines retain the threshold of a S$5 million annual turnover in Singapore. However, the worldwide turnover threshold has been broadened: as mentioned above, it now covers the combined worldwide turnover in the financial year preceding the transaction of all the parties, which must be below S$50 million.

Obtaining a Confidential Opinion from the CCS

A new procedure for obtaining a confidential opinion from the CCS on the parties’ proposed merger is set out. In short, merger parties who are concerned with preserving the confidentiality of a transaction may approach the CCS for confidential advice on whether the proposed merger is likely to raise competition concerns in Singapore. They will be expected to provide information on the merger that is similar to what is required in the Form M1 (the prescribed form for a standard Phase 1 merger notification). The CCS will assess the merger internally without making third party enquiries and at the end of the process, the CCS will issue a letter stating whether it considers that the merger is likely to raise competition concerns in Singapore.

In response to feedback as to the new procedure, the 2012 Guidelines now incorporate the following assurances:

  • The CCS will not disclose to other organisations or competition authorities in other jurisdictions the information provided by the party requesting confidential advice, nor the fact that confidential advice has been requested, without first obtaining the relevant waivers.
  • Where a party has requested confidential advice, it must meet certain conditions stipulated in the 2012 Guidelines. The CCS has included an assurance that confidential information provided to it for this purpose will be returned to the party making the request if the CCS decides that the conditions for giving confidential advice have not been met.

CCS’s Assessment of a Merger

The 2012 Guidelines provide guidance on what constitutes confidential information for the purposes of making confidentiality claims when merger parties provide information to the CCS for its assessment of the merger. The CCS cautions against overly wide or blanket confidentiality claims and also lists several examples of information which would not be considered confidential, such as:

  • Information which relates to the business of the merger parties but is not commercially sensitive in the sense that it would cause harm to the business if disclosed;
  • The merger parties’ views of how the competitive effects of the merger could be analysed; and
  • Information that is general knowledge within the industry or is likely to be readily ascertainable by any reasonably diligent market participant or trade analyst.

At the end of a Phase 1 review of a merger, the CCS case team may notify the merger parties of any issues giving rise to competition concerns in order to allow the merger parties to address these issues by giving the CCS appropriate commitments. Following feedback, the 2012 Guidelines clarify that, for the purposes of the Singapore Code for Takeovers and Mergers, such a notification does not constitute a decision to proceed to a Phase 2 review. For such merger situations, the CCS will issue a separate letter stating its decision to proceed to a Phase 2 review.

Market Intelligence and Complaints from Third Parties

Finally, the 2012 Guidelines clarify the CCS’s approach to market intelligence and the role of complainants and third parties in the context of merger control. The 2012 Guidelines make it clear that the CCS keeps markets under review to ascertain what mergers or acquisitions are taking place, and will approach merger parties and other third parties to gather further information where it identifies transactions that may potentially raise competition concerns.  The CCS has also indicated that it may publish a notice on its website indicating that it is considering whether or not a completed or anticipated merger that has not been notified to it may raise competition concerns.