SINGAPOREAN UPDATE – Proposed Changes to Singapore’s Guidelines for Merger Control


  • Changes have been proposed to the Competition Commission of Singapore’s Guidelines on Merger Procedures.
  • The changes give parties greater guidance on the self-assessment of mergers, obtaining a confidential opinion, and the treatment of confidential information.


On 20 February 2012, the Competition Commission of Singapore (“CCS”) issued a consultation paper (“Consultation Paper”) proposing various changes to its Guidelines on Merger Procedures (“Guidelines”). The Guidelines essentially set out the procedures that are followed by the CCS in its review of notified mergers. This set of proposed changes (“Proposed Guidelines”) are intended to update the Guidelines to reflect the experience in merger control gained by the CCS over the last four and a half years. The CCS is not proposing any changes to the Guidelines on the Substantive Assessment of Mergers at this juncture

The main changes to the Guidelines that have been proposed are as follows:

  • A new section provides parties with guidance when considering whether their merger is likely to be a prohibited merger under section 54 of the Competition Act and should therefore be notified to the CCS for approval;
  • The CCS’s approach to market intelligence and the role of complainants and third parties in the context of merger control is clarified;
  • A new procedure for obtaining a confidential opinion from the CSS on the parties’ proposed merger is set out; and
  • Guidance is provided on what constitutes confidential information for the purposes of providing information to the CCS for its assessment of the merger.

Guidance for the Self-Assessment of Mergers

By way of background, it should be noted that the Competition Act does not require the approval of the CCS before a merger may be undertaken. However, where a merger results in a substantial lessening of competition (“SLC”) within any market in Singapore for goods or services, that merger is prohibited. If the CCS has reasonable grounds for suspecting that a merger has infringed, or that an anticipated merger if carried into effect will infringe, this prohibition, it may open an investigation on its own initiative. Ultimately, if the CCS determines that there has indeed been a SLC, it can require parties to split up the merged entity and/or impose financial penalties on them.

Because notification of a merger is voluntary, parties have to assess for themselves whether the merger is likely to result in a SLC and would hence need to be notified to the CCS. To enable parties and their counsels to engage in this self-assessment, the Proposed Guidelines provide guidance on the types of mergers that would raise concerns.

On the one hand, a new minimum threshold is introduced. The Proposed Guidelines indicate that mergers involving small companies are unlikely to give rise to a SLC. Small companies, in turn, are defined as companies who, in the financial year preceding the transaction, had a turnover in Singapore below S$5 million, and a turnover worldwide below S$10 million.

On the other hand, merger parties are strongly encouraged to notify the CCS where the following two conditions are met:

  • The merger parties supply goods or services of the same description to customers in Singapore. In this regard, the Proposed Guidelines advise that the merger parties should have regard to the narrowest reasonable description of goods or services. Furthermore, there is no need for merger parties to consider the degree of supply and demand side substitution in order to define the relevant market.
  • In addition, the merger parties’ combined share of the supply of the overlapping goods or services in Singapore exceeds 40%. In relation to determining whether or not the 40% share is met, the parties can refer to sales by value, volume, number of (retail) outlets, number of bids won, etc.

It should be noted that the Proposed Guidelines refer to a test based on the parties’ share of the supply of goods or services and not the parties’ share of the market.

Market Intelligence and Role of Third Parties

Where a merger is not notified, the Consultation Paper reminds parties that the CCS may conduct an investigation if there are reasonable grounds for suspecting that a merger has infringed, or that an anticipated merger if carried into effect will infringe, the prohibition against mergers that result in a SLC. Such reasonable grounds may be provided from the CCS’s own market intelligence or as a result of complaints received.

The Proposed Guidelines also clarify the role of third parties and complainants. They explain that the CCS is under no obligation to follow-up or investigate all complaints relating to non-notified mergers. This is in line with the voluntary nature of the merger regime in Singapore, and also aims at discouraging speculative complaints. As regards third parties, the Proposed Guidelines reiterate the position that they can express their views on notified mergers and on commitments, and can also apply to the courts for review.

Confidential Opinion from the CCS

The Proposed Guidelines set out a new process whereby merger parties may obtain a confidential opinion from the CCS whether a merger is likely to raise anti-competition concerns. It is proposed that parties may approach the CCS for such an opinion in the following circumstances:

  • The merger must not be completed but there must be a good faith intention to proceed with the transaction, as evidenced to the satisfaction of the CCS by the party or parties requesting the confidential advice.
  • The merger must not be in the public domain. In exceptional circumstances, the CCS may consider giving confidential advice in relation to mergers that are no longer confidential, but the requesting party or parties must provide good reasons why they wish to receive confidential advice.

When confidential advice has been sought, the CCS reserves the right to investigate the merger situation where the statutory test for doing so is met. The Proposed Guidelines also clarify that the requesting party or parties are expected to keep the CCS informed of significant developments in relation to the merger situation in respect of which confidential advice was obtained, for example, the completion date or the abandonment of the merger.

Confidential Information

The Proposed Guidelines set out the CCS’s practice of requiring parties to provide two versions of their notification filings: a version with confidential information redacted, and another setting out the confidential information. The redacted version may be used by the CCS to approach third parties, while the unredacted version will be kept confidential by the CCS.

The Proposed Guidelines warn, however, that the CCS can stop the indicative timeframe of its review if it considers the confidentiality claims made by the parties to be excessive or unreasonable. They also clarify that the following types of information are not likely to be considered confidential by the CCS:

  • Information that relates to the business of any of the merger parties but is not commercially sensitive in the sense that disclosure would cause harm to the business;
  • Information that reflects the merger parties’ views of how the competitivity effects of the merger could be analysed—this type of information can be produced by any reasonably well-informed market participants, trade analysts, or legal/economic advisors; 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.

Finally, the Proposed Guidelines state that while the CCS usually publishes only non-confidential merger decisions, it may disclose confidential information when necessary. This may occur, for example, in the context of third party enquiries or to explain the CCS’s reasoning in its final decisions.