1) Is a merger control regulation in force?

Yes. The Merger control provisions under the Singapore Competition Act 2004 ("Competition Act") came into force on 1st July 2007.

2) Which authorities enforce the merger control regulation?

The Competition and Consumer Commission of Singapore (“CCCS”) enforces the merger regime under the Competition Act. Note, however, that sectoral merger control regulations are enforced by the relevant sectoral regulators (e.g. the Infocomm Media Development Authority or the Civil Aviation Authority of Singapore).

Decisions by CCCS may be appealed to the Competition Appeal Board.

3) Relevant regulations and guidelines with links:

The main provisions applicable to mergers are contained in Part III, Division 4 and Division 4A of the Singapore Competition Act (“Competition Act”). Specifically, Section 54 of the Competition Act prohibits mergers that may result or have resulted in a substantial lessening of competition in any market in Singapore. More detailed rules may be found in various regulations issued under the Competition Act and in Guidelines issued by the CCCS.

CCCS has reviewed and revised a number of its guidelines with effect from 1 February 2022. The CCCS Guidelines on the Substantive Assessment of Mergers was amended to provide more guidance on issues relating to CCCS’ assessment of mergers, such as the relevance of proprietary rights and data as barriers to entry or expansion, including those involving digital platforms. The revisions also provide that the potential impact arising out of conglomerate mergers, especially mergers between parties in closely related markets, must be considered and addressed. 

CCCS also made adjustments to its Form M1 and M2 templates for merger notifications. The key changes were to Form M1, which includes an additional question on conglomerate effects (where relevant), and requires details of merger parties’ top ten (instead of top five) customers.

Links to the relevant legislation, regulations and guidelines are listed here:

4) Does general competition regulation apply to mergers or ancillary restrictions?

Under the Third Schedule to the Competition Act, the prohibition of anti-competitive agreements (Section 34 of the Competition Act) does not apply to any agreement that results or would result in a merger and the prohibition of abuse of dominance (Section 47 of the Competition Act) does not apply to any conduct that results or would result in a merger. 

Generally, restrictions of competition that are directly related and necessary to the implementation of the merger, for instance a (limited) non-competition obligation on the seller, are considered ancillary to the merger and will be assessed as part of, and under, the merger review. Such ancillary restrictions are not subject to separate scrutiny under Section 34 and/or Section 47 of the Competition Act. However, restrictions that go beyond what may be considered as ancillary to the merger may be caught by the general prohibition of anti-competitive agreements or abuse of dominance as the case may be.

5) May an authority order a split-up of a business irrespective of a merger?

Yes. Under the Competition Act, CCCS may require any party to an anti-competitive agreement and any person engaged in an abuse of dominance “to dispose of such operations, assets or shares of such undertaking in such manner as may be specified by the Commission”. The same applies to parties to a merger that results in a substantial lessening of competition.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Under the Fourth Schedule to the Competition Act, the general merger regime does not apply to any merger:

1. approved by any Minister or regulatory authority (other than CCCS) pursuant to any requirement for such approval imposed by any written law;
2. approved by the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act (1970) pursuant to any requirement for such approval imposed under any written law; or
3. under the jurisdiction of any regulatory authority (other than CCCS) under any written law relating to competition, or code of practice relating to competition issued under any written law.

To illustrate, mergers in the telecommunications and media sectors involving certain licensees must be notified to and/or approved by the Infocomm Media Development Authority (IMDA); mergers involving an airport licensee must be notified to and approved by the Civil Aviation Authority of Singapore (CAAS) and mergers involving banks incorporated in Singapore requires the approval of the Monetary Authority of Singapore.

7) Are any parts of the territory exempted or covered by particular regulation?

No.

8) Is merger filing mandatory or voluntary?

Merger filing is voluntary. However, CCCS takes the view that notification should be made where the thresholds set out in topic 14 are crossed. This effectively suggest that the approach in Singapore is mandatory where thresholds are crossed. There is no limitation period on investigations and in practice CCCS has initiated investigations of unnotified mergers that were completed years ago.

9) Is there a general definition of transactions subject to merger control?

Yes. Under Section 54 of the Competition Act a merger occurs where:

1. two or more undertakings, previously independent of one another, merge;
2. one or more persons or other undertakings acquire direct or indirect control of the whole or part of one or more other undertakings (this includes the creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity); or
3. the result of an acquisition by one undertaking (the first undertaking) of the assets (including goodwill), or a substantial part of the assets, of another undertaking (the second undertaking) is to place the first undertaking in a position to replace or substantially replace the second undertaking in the business (or part of the business) in which that undertaking was engaged immediately before the acquisition.

Note that certain transactions of a temporary nature are not considered to be mergers subject to merger control (see topics 19 and 20).

10) Is "change of control" of a business required?

Yes, generally a merger will only be considered to take place if the transaction results in a change of control over a business.

However, transactions that result in the establishment of a new business (a joint venture) controlled by two or more businesses or persons already controlling one or more businesses will also constitute a merger under certain conditions.

11) How is “control” defined?

The Competition Act states that “control” of an undertaking exists where by reason of rights, contracts or any other means, or any combination of rights, contracts or other means, decisive influence is capable of being exercised with regard to the activities of the undertaking.

Control may be held by one or more persons or businesses jointly. Establishment of joint control as well as changes in the group of owners with a controlling interest constitute a change of control. Consequently, there is a change of control when a business goes from 50/50 ownership to being solely controlled by only one of the existing owners, or when one of the existing owners sells its share to a third party.

Joint control may be established between a majority and a minority shareholder on the basis of veto rights regarding decisions that are essential for the strategic operation of the business. A merger will occur both when the joint control is established and again when it is dissolved; for instance, if a minority shareholder gives up certain essential veto rights so that the majority shareholder gains sole control, this will amount to a merger.

The CCCS Guidelines on the Substantive Assessment of Mergers provide further guidance on the concepts of "Control" and "Acquisition of control".

12) Acquisition of a minority interest

The acquisition of a minority interest that does not result in the acquisition of control (whether joint or sole) over a business, i.e. that does not confer to the minority shareholder the ability to have a decisive influence over the business, is not subject to merger control. Note, however, that under the CCCS Guidelines on the Substantive Assessment of Mergers, the ownership of 30% to 50% of the voting rights of an undertaking gives rise to a rebuttable presumption that decisive influence exists. Veto rights which provide a minority shareholder with the ability to block strategic business decisions of an undertaking may also be sufficient to establish control.

13) Joint ventures/joint control – which transactions constitute mergers?

The following transactions regarding businesses subject to joint control may be subject to merger control if the joint venture is "full function":

1. Establishment of a joint venture
2. Change from joint to sole control
3. Dissolution – provided (part of) the business of the joint venture is transferred to one or more of the businesses controlling the joint venture or a third party
4. Change in or extension of the activities of a joint venture – provided that further assets, contracts, know-how, rights etc. are transferred to the joint venture to form the basis for the new activities.
5. Change in participants/owners – for instance if one of the controlling businesses sells its share in a joint venture to another business, or if one of the controlling businesses is acquired by another business. In the latter case, the competition authorities may consider that the transaction results in two separate mergers and that these should be assessed separately with respect to who are parties to the transaction and whether the thresholds for merger filing are exceeded.

A joint venture that is not “full function”, because it does not, on a lasting basis, perform all the functions of an autonomous economic entity, is not subject to merger control but may be scrutinized under the general prohibition on anti-competitive agreements. Whether a joint venture is considered “full function” or merely “cooperative” depends on the level of the joint venture’s dependence on its parents and to what extent the joint venture has an independent presence in the market.

Even if a joint venture is “full function” and therefore subject to merger control (provided the thresholds are met), the general prohibition on anti-competitive agreements may also be applied if the joint venture has the coordination of the market behaviour of the parent companies as object or effect.

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

Merger filing in Singapore is not based on turnover thresholds. However, a merger between small businesses, i.e. where each of the parties’ individual turnover in Singapore in the financial year preceding the transaction is below SGD 5,000,000 and the combined worldwide turnover of all the parties is below SGD 50,000,000, are unlikely to be investigated.

b) Market share thresholds

The relevant indicative thresholds are:

1. the ‘merged entity’ has a market share of 40%, or
2. the ‘merged entity’ has a market share of more than 20% and the post-merger combined market share of the three largest firms (CR3) in the market(s) is 70% or more.

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

The thresholds as set out in topic 14 apply to all types of businesses, but does not include mergers excluded by the Competition Act

16) Rules on calculation and geographical allocation of turnover

N/A

17) Special rules on calculation of turnover for particular businesses

N/A

18) Series of transactions that must be treated as one transaction

Whilst there is no guidance on when and whether a series of transactions must be treated as one transaction, there are instances when a series of transactions can nevertheless be deemed to be the one. In any case, the fact that a merger is the result of a series of transactions must be disclosed to CCCS when providing the details of the merger. 

19) Temporary change of control

Under the Competition Act, an acquisition of control will not amount to a merger and, therefore, will not fall under the merger regime where control is acquired by an undertaking the normal activities of which include the carrying out of transactions and dealings in securities for its own account or for the account of others and:

1. the control concerned is constituted by the undertaking’s holding, on a temporary basis, securities acquired in another undertaking; and
2. any exercise by the undertaking of voting rights in respect of those securities, whilst that control subsists: (i) is for the purpose of arranging for the disposal of all or part of the other undertaking or its assets or securities within a period of 12 months (which may be extended by CCCS) from the date on which control of this other undertaking was acquired; and (ii) is not for the purpose of determining activities of the other undertaking, that could affect competition in markets for goods or services in Singapore.

20) Special industries, owners or types of transactions

Industries:

The merger control regulation does not apply to mergers involving any undertaking relating to the following specified activities:

1. the supply of ordinary letter and postcard services by a person licensed and regulated under the Postal Services Act 1999;
2. the supply of piped potable water;
3. the supply of wastewater management services, including the collection, treatment and disposal of wastewater;
4. the supply of bus services by a licensed bus operator under the Bus Services Industry Act 2015;
5. the supply of rail services by any person licensed and regulated under the Rapid Transit Systems Act 1995; and
6. cargo terminal operations carried out by a person licensed and regulated under the Maritime and Port Authority of Singapore Act 1996.

Owners / Types of transactions:

Under the Competition Act, the following transactions do not amount to a merger, and may therefore not be subject to merger control:

1. the person acquiring control is a receiver or liquidator acting as such or is an underwriter acting as such;
2. all of the undertakings involved in the merger are already, directly or indirectly, under the control of the same undertaking;
3. control is acquired solely as a result of a testamentary disposition, intestacy or the right of survivorship under a joint tenancy.

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. Foreign-to-foreign mergers which would result in a substantial lessening of competition in Singapore are prohibited, regardless of where the undertakings concerned are registered or whether they own assets in Singapore.

22) No overlap of activities of the parties

There is no exemption for non-horizontal mergers. The prohibition of mergers that would result in a substantial lessening of competition applies to all mergers, whether horizontal, vertical or conglomerate mergers. CCCS has made it clear that whilst vertical mergers typically present fewer competition issues, to the extent that thresholds are crossed, such mergers ought to be notified as well. This is likewise the position for conglomerate mergers.

23) Other exemptions from notification duty even if thresholds ARE met?

There are no other exemption.

24) May a merging party file voluntarily even if the thresholds are not exceeded?

Yes. The thresholds provided by CCCS are indicative only to help the parties in assessing whether a notification to CCCS should be made or not. The key assessment parameter is whether there is a substantial lessening of competition.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

CCCS can require parties to notify their merger even if thresholds are not crossed and to the extent that they are of the view that there could be a substantial lessening of competition.

26) Referral within the jurisdiction

There are no prohibitions against one regulator making a referral to another in Singapore, subject only to confidentiality requirements.

27) Referral from another jurisdiction

There are no prohibitions against receiving a referral from another country, subject only to confidentiality requirements.

28) Referral to another jurisdiction

N/A

29) May the merging parties request or oppose a referral decision?

N/A

30) Stage of transaction when notification must be filed

It is highly recommended that a transaction be notified to CCCS before the closing of the transaction. Whilst notification of a merger to CCCS is voluntary and can be made either before or after the implementation of the merger, to the extent that it is likely to result in a substantial lessening of competition the CCCS can take such action as it deems necessary to prevent implementation. Such action include imposing interim measures to hold separate whilst it investigates the merger. Parties also bear the risk of financial penalties if CCCS determines that the implemented merger led to a substantial lessening of competition.

31) Pre-notification consultations

Parties having the good faith intention to engage in their transaction may approach CCCS to discuss the nature of their merger and the specific details CCCS might require as part of the notification. This is referred to as Pre-Notifications Discussions (“PNDs”). Generally, the parties will have to provide at the start and in any event in the course of the PNDs a draft of the Form M1, i.e. fairly complete information.

PNDs are useful as they allow the parties to discuss and agree with CCCS on the scope of the information that the parties will need to provide for their Form M1 to be declared complete. It may further assist in speeding up the merger review since CCCS will have reviewed the draft Form M1 and discussed any possible gaps therein with the parties before the formal notification is done.

Separately, parties may apply to CCCS for a Confidential Advice in instances where the following conditions are met: the merger has not been completed but the parties have a good faith intention to proceed with the transaction; the merger is not public and the merger raises a genuine concern as to whether notification is recommended or not.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

N/A

33) Forms available for completing a notification

There are two forms available: Form M1 for the initial merger notification and Form M2 if CCCS requires additional information for a Phase 2 proceeding. 

34) Languages that may be applied in notifications and communication

English.

35) Documents that must be supplied with notification

The following documents (where available) must be included in the application:

1. all relevant documents to support statements and explanations made in the form(s);
2. copies of the final or most recent version of all documents bringing about the merger, whether by agreement between the merger parties, acquisition of a controlling interest or a public bid;
3. in the case of a public bid, a copy of the offer document;
4. copies of the most recent annual report and accounts (or equivalent for unincorporated bodies) for each of the merger parties;
5. copies of all analyses, reports, studies, surveys (including consumer surveys), and similar documents prepared for the purpose of assessing, analysing or giving a view on the merger with respect to market shares, competitive conditions, competitors (actual and potential), the rationale for the merger, potential for sales growth or expansion into other product or geographic markets, and/or general market conditions. For each of these documents, the date of preparation and the designation of each individual who prepared the document should be stated (if not contained in the document itself);
6. copies of the two most recent business plans for each merger party and, where available, a copy of the (draft) business plan for the merged entity; and
7. copies of any relevant market research reports that are available to either of the merger parties. Where geographic markets are arguably wider than national, market research that focuses on areas outside of, or including, Singapore, is also relevant.

36) Filing fees

The filing fees for a decision on whether a merger or a proposed merger would result in a substantial lessening of competition or not are set out below:

37) Is implementation of the merger before approval prohibited?

No. However, to the extent that the merger could result in a substantial lessening of competition, CCCS may decide to impose interim measures on the merger parties, which may include a direction not to implement the merger and to continue to hold businesses separate while CCCS is reviewing the merger. Note that implementing the merger before clearance could result in an investigation.

38) May the parties get permission to implement before approval?

There are no formal rules in this regard. Yet, it is possible to negotiate this with CCCS.

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that prevents sensitive business information from being used for purposes other than assessing the viability of the proposed transaction/merger.

There are no guidelines on what may be considered acceptable preparatory steps. However, CCCS has stated in its Guidelines on Merger Procedures that “Parties to an anticipated merger should exercise due caution when exchanging commercially sensitive information (such as prices and customer details) in the context of the merger negotiations and the application and review process. The exchange of such information may infringe the section 34 prohibition of the Act (which prohibits anti-competitive agreements) where it has the object or effect of restricting competition within Singapore”.

40) Veto rights before closing and "Ordinary course of business" clauses

N/A

41) Implementation outside the jurisdiction before approval – "Carve out"

If the transaction is inextricably linked across the different countries and cannot be in any way split up, and to the extent it could be said that there will be an effect in Singapore, then a carve-out will not be possible.

42) Consequences of implementing without approval/permission

Whilst there is no requirement to obtain approval of a proposed transaction before implementing it, CCCS has the power to investigate any proposed or implemented merger if it suspects that the merger would result or has resulted in a substantial lessening of competition in Singapore. If CCCS makes a decision that a merger has resulted in a substantial lessening of competition, it can impose on the parties any direction it considers appropriate to bring the infringement to an end including, for example, a direction to divest part of the assets, unwind the merger and/or impose financial penalties of up to 10% of the infringing parties’ turnover in Singapore for the period of the infringement. Additionally, CCCS may issue interim directions while reviewing a notified merger or convert a notified merger into an investigation or investigate an unnotified merger, which includes a direction to the parties not to implement their proposed merger or to hold the business separate.

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

The test is whether the merger has resulted, or the proposed merger is likely to result, in a substantial lessening of competition. The test is applied by comparing the extent of competition in the relevant market with and without the merger. In assessing whether there is substantial lessening of competition, any likely efficiencies to be gained are considered.

45) May any non-competition issues be considered?

Yes, as CCCS takes a holistic approach in its review. 

46) Special tests or criteria applicable for joint ventures

No.

47) Decisions and remedies/commitments available

A merger may be approved with or without commitments or be prohibited. Commitments may take any form and they can be either structural or behavioural and with or without time limitations.

If a merger has already been implemented, CCCS may prohibit the merger and order a separation of the businesses or any other direction it deems fit to restore competition. CCCS may also impose financial penalties on the parties for infringing the prohibition of mergers resulting in a substantial lessening of competition.

48) How and when will details about the merger be published?

A non-confidential summary of the transaction will be published by CCCS on the public register on its website once CCCS accepts the merger filing as being complete.

The non-confidential summary of the merger made available on the public register is part of the notification form the parties file with CCCS and includes:

1. the names of the merger parties;
2. a description of the transaction;
3. a description of the business activities of the merger parties worldwide and in Singapore;
4. a description of the overlapping goods or services, including brand names;
5. a description of substitute goods or services;
6. the applicant’s views on the relevant market(s) and their structure; and
7. the applicant’s views on the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant).

The public register will be updated if/when CCCS is considering accepting commitments or to proceed to a Phase 2 review and when a decision is made. A non-confidential version of CCCS grounds of decision will further be made available in the public register.

Upon publication of the summary of the merger, third parties are invited to submit their views on the transaction to CCCS. Third parties will also be invited to provide comments on commitments offered by the parties in the course of the merger review.

49) Access to the file for the merging parties and third parties

The merging parties:

If, at the end of Phase 2, CCCS reaches a preliminary view that the merger will result in a substantial lessening of competition, it will issue a Provisional Statement of Decision to the applicant(s) setting out the reasons why CCCS is of the view that the merger should be prohibited. Only at this stage will the applicant(s) be given the opportunity to access the file. Note that CCCS’s internal documents and confidential information provided by third parties will not be accessible to the applicant(s).

Third parties:

Third parties do not have access to the file.

50) Who can appeal and what may be appealed?

The applicant(s) may, within 14 days after receiving the Provisional Statement of Decision, apply to the Minister of Trade and Industry for the merger to be exempted from the section 54 prohibition on the ground of any public interest consideration. The decision by the Minister to exempt or not to exempt the merger is final.

CCCS’s decision that the proposed merger or the implemented merger will result or has resulted in a substantial lessening of competition in violation of Section 54 of the Act can be appealed by the merger parties to the Competition Appeal Board within 4 weeks from the date the infringement decision was notified to the applicant(s) or the date the decision was published, whichever the earlier. The merger parties may make further appeals against the decisions of the Competition Appeal Board to the General Division of the Singapore High Court, but only on points of law and/or the financial penalty amount.

Where CCCS’s decision imposes directions on third parties, these parties may appeal to the Competition Appeal Board against the directions given to them. Otherwise, third parties cannot appeal CCCS’s decision that section 54 of the Act has been infringed.