Notification and clearance timetable

Filing formalities

What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

There are no deadlines for notification, nor are there sanctions for failure to notify, as Singapore operates a voluntary merger regime. Merger parties have the option of proceeding, at their own commercial risk, with any merger during the notification process.

If the merger parties wish to notify their merger to the Competition and Consumer Commission of Singapore (the Commission) for a decision, they may do so at any time before, during or after the merger. In the case of completed mergers, parties are encouraged to notify as soon as possible after completion. Parties that wish to apply for a decision for an anticipated merger should only do so once the parties have a bona fide intention to proceed with the transaction and the merger has been made public (or if the parties have no objection to the Commission publicising their merger).

In deciding whether to notify a merger and when to notify the Commission, merger parties should bear in mind that the Commission may ‘unwind’ a merger that has already been effected, and (in the case of intentional or negligent infringements) impose financial penalties.

Which parties are responsible for filing and are filing fees required?

Any party to a merger or anticipated merger may apply to the Commission for a decision. The Commission encourages joint filing.

In general, the filing fees for mergers and anticipated mergers are as follows:

  • where the net aggregate turnover of the target undertaking or asset is equal to or less than S$200 million, the fee payable is S$15,000;
  • where the net aggregate turnover of the target undertaking or asset is between S$200 million and S$600 million, the fee payable is S$50,000; and
  • where the net aggregate turnover of the target undertaking or asset is above S$600 million, the fee payable is S$100,000.

 

If the merging parties are small or medium-sized enterprises (SMEs), or if the acquiring party is an SME and direct or indirect control in the SME will not be (or has not been) acquired, the filing fee will be S$5,000. SMEs are defined in the Competition (Fees) Regulations 2007 as undertakings with an annual sales turnover of not more than S$100 million or employing no more than 200 staff.

What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

Notification is voluntary, and there is no requirement to suspend the implementation of a merger or anticipated merger before clearance. However, parties who give effect to or proceed with mergers without clearance do so at their own commercial risk.

Pre-clearance closing

What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?

No requirement to suspend a merger or anticipated merger is specified in the Competition Act. However, where there is completion before clearance, and the Commission subsequently finds that the merger infringes or is likely to infringe the section 54 prohibition, the Commission may take action to remedy, mitigate or prevent the harmful effects of infringement and prevent the recurrence of infringement. The Commission has the power to, among other things, require a merger to be dissolved or modified.

Parties should also note that the Commission can impose interim measures where it has not completed its investigations but has a reasonable suspicion that the section 54 prohibition has been infringed or will be infringed. It may make such directions as it considers appropriate for the purpose of preventing merger parties from taking any action that might prejudice the Commission’s ability to consider the merger situation or to impose appropriate remedies.

Interim measures may also be imposed to prevent serious, irreparable damage to a particular person or category of persons or to protect the public interest. These measures may include a direction that the merger or anticipated merger be suspended. As a matter of practice, the Commission is unlikely to use these powers unless it believes that there is a real possibility of serious competition concerns.

In view of the risks involved in proceeding to implement a merger that may infringe the prohibition, parties may choose to voluntarily suspend implementation in whole or in part.

Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

Notification of a merger is voluntary, and merger parties may, at their own risk, proceed with closing before clearance or without seeking clearance. This applies equally to foreign-to-foreign mergers. 

What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

There is no prohibition against closing before clearance; however, parties should take note of the actions that the Commission may take if the merger is found to have an anticompetitive effect in Singapore.

Public takeovers

Are there any special merger control rules applicable to public takeover bids?

There are no special rules in the Competition Act. Takeovers and mergers of listed companies in Singapore are subject to non-statutory rules in the Code on Take-overs and Mergers (the Take-over Code), which is administered by the Securities Industry Council. Parties involved in public takeover bids should refer to the Take-over Code and the Guidance Note on the Merger Procedures of the Competition Commission of Singapore under Appendix 3 of the Take-over Code.

An offeror making a mandatory general offer subject to the Take-over Code must include a precondition that the offer lapses if the Commission proceeds to a Phase II review or prohibits the acquisition before the close of the offer. If the Commission prohibits the acquisition, the Securities Industry Council may require the offeror to reduce its shareholding back to below 30 per cent or a level that is less than the 1 per cent limit on acquisitions in any six-month period before the mandatory general offer was triggered.

An offeror making a voluntary general offer subject to the Take-over Code must impose a precondition that the offer lapses if the Commission proceeds to a Phase II review or prohibits the acquisition before the close of the offer, and may include further conditions that the Commission’s favourable decision must be on terms acceptable to the offeror.

Documentation

What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?

Before submitting Form M1, merger parties intending to make an application may approach the Commission for pre-notification discussions (PNDs) to facilitate their preparation of the form and to expedite the review process. PNDs help merger parties ascertain what information will be required by the Commission during the merger review process and help the Commission to understand the transaction early on and clarify the information and evidence that will be required in Form M1. The Commission is prepared to engage in PNDs for anticipated mergers that are not yet in the public domain but will not entertain discussions on purely speculative or hypothetical transactions.

Merger parties seeking a PND should contact the Commission by phone through its hotline or email. The formality and length of the PND process depend on the preference of the merger parties, the complexity of the transaction and the potential concerns raised by the merger. The Commission considers PNDs to be most useful where parties can provide a draft Form M1.

During the PND, the Commission will help to identify the information needed to provide a complete submission and any other useful information that might expedite its review. For mergers that involve more complex products or that raise potential competition issues, PNDs minimise the risk that the mergers will not be cleared in Phase I. The Commission will generally not, in the context of PNDs, give its views on whether a merger situation is likely to require a Phase II assessment or if it would lead to a substantial lessening of competition.

The Commission will review a merger situation in one or two phases, and the level of detail required will increase with each phase. For each phase, merger parties must submit the duly completed merger review Forms M1 and M2 respectively (available on the Commission’s website).

Form M1 requires information relating to, among other things:

  • ownership structure;
  • the notified transaction;
  • the activities of the merger parties;
  • the industries affected;
  • the market definition;
  • market shares;
  • efficiency gains; and
  • ancillary restrictions, if they are included in the notification.

 

Merger parties are also required to provide their competitive assessment of the transaction, including:

  • their assessment of the counterfactual (the competitive situation without the merger);
  • competitors in the market;
  • barriers to entry;
  • existing and future countervailing buyer power;
  • coordinated and non-coordinated effects of the transaction;
  • vertical effects, if there is a potential vertical relationship between the merger parties;
  • conglomerate effects, if there is a potential conglomerate relationship between the merger parties; and
  • cooperative effects of the joint venture, if the transaction is a joint venture.

 

Form M2 requires further information relating to, among other things:

  • the market conditions in the relevant markets, including the structure of demand and supply;
  • the importance of research and development;
  • the prevalence of cooperative agreements;
  • possible efficiency gains arising from the merger;
  • the likely effects of the merger; and
  • any applicable failing firm or division arguments that the merger parties wish to submit.

 

The submission of Form M2 will only be required when the Commission is of the view that it is necessary to proceed to a Phase II review, in which case the applicant will be notified accordingly.

Parties should note that even where the applicant has submitted complete Forms M1 or M2, the Commission may require the applicant to provide additional information that is over and above what is required under Forms M1 and M2.

Investigation phases and timetable

What are the typical steps and different phases of the investigation?

Two separate processes are available to parties before formal notification to the Commission. First, subject to section 55A of the Competition Act and the CCCS Guidelines on Merger Procedures, parties may seek confidential advice from the Commission on whether an anticipated merger is likely to raise competition concerns in Singapore and whether a notification is advisable.Second, parties may engage the Commission in PNDs to discuss the content and timing of their notifications to expedite the merger review process.

Confidential advice may be requested through the Commission’s hotline or by email. The Commission will then agree on a provisional timeline for parties to submit full information similar to that required in Form M1. No third-party enquiries will be carried out, and third-party contact details are not required.

The Commission will carry out an internal assessment of the merger and may meet with the requesting parties. At the end of the process, it will provide a letter stating whether the merger is likely to raise competition concerns in Singapore and whether notification is advisable, within 14 working days of receiving all required information. The advice is not binding on the Commission, and the merger may be investigated regardless of the advice given.

PNDs are similarly commenced by contacting the Commission through its hotline or by email. No specific timetable is given, although the Commission states that their length and formality depend on the preference of the merger parties, the complexity of the transaction and the concerns that the merger may raise. The Commission states that PNDs are most useful where a draft Form M1 is provided.

The formal notification process begins with the filing of Form M1 with the Commission. The Commission will first determine if the application is complete, with the necessary supporting documents and filing fees. Once a completed Form M1 is accepted, the Phase I review commences. The Commission will gather information about the competitive effect of the merger situation from the applicants and from third parties. This is expected to be completed within 30 working days.

If the Commission is unable to form the conclusion during the Phase I review that the merger situation does not raise competition concerns, it will provide the applicant with a summary of its key concerns, and, upon the filing of a complete Form M2 and response to the Phase II information request, the Commission will proceed to Phase II review. A Phase II review entails a more detailed and extensive examination of the effects of the merger situation. Accordingly, the Commission endeavours to complete it within 120 working days.

During the review process, the Commission may impose interim measures to preserve its ability to review the merger situation further or preserve its ability to impose appropriate remedies later, or both. Interim measures may also be imposed as a matter of urgency to protect public interest or to prevent serious, irreparable damage to persons.

What is the statutory timetable for clearance? Can it be speeded up?

Phase I

Phase I review entails a quick review and allows merger situations that clearly do not raise any competition concerns to proceed without undue delay.

The Commission expects to complete a Phase I review within 30 working days, where day one is the working day after the Commission receives a completed Form M1. By the end of this period, the Commission will decide whether to issue a favourable decision to allow the merger situation to proceed or to carry on to a Phase II review.

 

Phase II

The indicative time frame of 120 working days for a Phase II review commences when the Commission notifies the applicants that the merger situation has proceeded to a Phase II review, and after the Commission receives a complete Form M2 and a response to the Phase II information request that the Commission deems satisfactory. In any case, the Phase II review period will not commence until the expiry of the indicative time frame of 30 working days for Phase I review.

Throughout the course of the application, the Commission may request further information above and beyond that required in Form M1 or Form M2. Failure to furnish such information may result in the Commission exercising its discretion to determine the application without providing a decision.

While the Commission typically reviews mergers within the indicative time frames, the time frames are not binding on the Commission, and the Commission may ‘stop the clock’ in a review if, for example, the merger parties do not respond to the Commission’s request for information in time or when commitments are being considered. The indicative time frames may also be extended in exceptional circumstances, upon informing the merger parties in writing in advance.

There is currently no mechanism in place to accelerate a merger clearance decision by the Commission.