Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
Notification is voluntary and the Competition Act does not specify any deadlines for notification. If the merger parties wish to notify their merger to 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 when the anticipated merger is no longer confidential. In deciding whether or not 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, if the Commission decides that the merger infringes the section 54 prohibition.
There are no deadlines for notification or 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, before notifying the Commission, or without notifying the Commission at all. The risk, as highlighted in question 5, is that the Commission may investigate a merger or anticipated merger on its own initiative if it has reasonable grounds for suspecting that section 54 has been infringed or will be infringed, and has the ability to subsequently make directions or impose financial penalties in respect of any infringement.
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 or anticipated mergers are as follows:
- where the 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 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 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 (SME) or if the acquiring party is an SME and direct or indirect control in the small or medium-sized enterprise will not be (or has not been) acquired, the filing fee will be S$5,000. SMEs have been defined in the Competition (Fees) Regulation 2007 as follows: businesses with 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?
For waiting periods, please refer to question 18, which sets out the general timetable for clearance. Notification is voluntary and there is no requirement to suspend the implementation of a merger or anticipated merger prior to clearance.
However, parties who give effect to or proceed with mergers prior to clearance by the Commission should note that they do so at their own commercial risk (see question 12).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?
As mentioned above, 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, inter alia, require a merger to be dissolved or modified. See question 24 for more details.
Parties should also note that the Commission has the power to direct 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 and to impose the appropriate remedies; preventing serious, irreparable damage to a particular person or category of persons; or protecting the public interest. These measures could 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 the merger situation raising 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.
As of 1 May 2019, the Commission has only exercised its power to take interim measures once, namely, in the Grab/Uber case where the parties, without seeking clearance from the Commission, proceeded to complete Grab’s acquisition of Uber’s South East Asian business in exchange for Uber’s acquisition of a 27.5 per cent stake in Grab. See question 36 for more details.
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. Parties should take note of the actions that the Commission may take in the event that the merger is found to have an anticompetitive effect in Singapore (see question 24).
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 in the event that the merger is found to have an anticompetitive effect in Singapore (see question 24).Public takeovers
Are there any special merger control rules applicable to public takeover bids?
There are no special rules in the Competition Act itself. Takeovers and mergers in Singapore are subject to non-statutory rules in the Singapore Code on Take-overs and Mergers, which is administered by the Securities Industry Council. Parties involved in public takeover bids should refer to the Singapore Code on Take-overs and Mergers and the Securities Industry Council Practice Statement on the Merger Procedures of the Competition Commission of Singapore for further information.
An offeror making a ‘mandatory general offer’ subject to the Singapore Code on Take-overs and Mergers is required to 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 the level before the mandatory general offer was triggered.
An offeror making a ‘voluntary general offer’ subject to the Singapore Code on Take-overs and Mergers is required to 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 and commencing the formal notification process, 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 are intended to help merger parties ascertain what information will be required by the Commission during the merger review process, and to help the Commission plan its work to facilitate an expeditious merger review process. The Commission is prepared to engage in PNDs for anticipated mergers 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 depends 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 at www.cccs.gov.sg).
Form M1 requires information relating to, inter alia:
- 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; and
- cooperative effects of the joint venture, if the transaction is a joint venture.
Form M2 requires further information relating to, inter alia:
- the market conditions of 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 information required in Form M2 may also be submitted voluntarily by the applicant when submitting Form M1 to expedite the process in more complex cases. Otherwise, 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, and 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, over and above that which is required under Forms M1 and M2 during its review process to enable it to assess the merger situation.Investigation phases and timetable
What are the typical steps and different phases of the investigation?
There are two phases of review (see question 18). The Commission’s Guidelines give an indicative time frame of 30 working days to complete a Phase I review and this time frame commences from the date on which the Commission accepts a complete Form M1 and receives the requisite filing fee. Should the Commission find that it is necessary to proceed to a Phase II review, the indicative time frame for completion is 120 working days, commencing from the date on which the Commission receives a complete Form M2.
The receipt of an application by the Commission does not indicate that the application is complete. The indicative time frames for the review of the merger notification commence only when the Commission receives a complete form that meets all the applicable filing requirements, accompanied by the relevant supporting documents and the appropriate fee. To avoid any unnecessary delay, merger parties should therefore ensure that the relevant forms are complete and meet all the filing requirements upon submission.
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, inter alia, if the merger parties do not respond to the Commission’s request for information within the stipulated time period or when commitments are being considered. The indicative time frames may also be extended by the Commission to accommodate the commitments process.
The Commission strongly encourages merger parties to engage the Commission in PNDs. PNDs permit the parties to ascertain information that will be necessary for their notification and help the Commission to plan its work to facilitate an expeditious merger review process. Please see question 16 for details on PNDs.
Merger parties may also wish to request confidential advice from the Commission to seek the Commission’s view on whether the merger is likely to raise competition concerns in Singapore and whether a notification is necessary. However, it should be noted that the Commission’s confidential advice is not binding and the Commission reserves the right to investigate mergers in all cases where confidential advice is given.
What is the statutory timetable for clearance? Can it be speeded up?
Two separate processes are available to parties before notification to the Commission. First, parties may seek confidential advice from the Commission on whether or not a merger is likely to raise competition concerns in Singapore and therefore whether a notification is advisable. See question 6 for details on confidential advice. Second, parties may engage the Commission in PNDs to discuss the content and timing of their notifications to expedite the merger review process. See question 16 for details on PNDs.
Confidential advice may be requested through the Commission’s hotline or by email. The Commission will then agree on a provisional timeline for the parties to submit full information similar to that required in Form M1. Third-party contact details are not required and third-party views will not be sought, and the Commission does not expect to request further information by way of written questions to the requesting party. The Commission will carry out an internal assessment of the merger and may meet with the requesting parties, and expects to provide its confidential advice in the form of 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 the 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 that meets all the applicable filing requirements is accepted, the indicative time frame of 30 working days for Phase I review commences and the Commission will review the transaction to determine whether it falls within the meaning of a ‘merger’ or ‘anticipated merger’ as defined in the Competition Act (and as outlined in question 2), and whether the transaction is excluded under paragraphs 1 and 2 of the Fourth Schedule of the Competition Act.
The Commission adopts a two-phase approach when evaluating applications.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 commencing from the date on which the Commission receives a completed Form M1, accompanied by the relevant supporting documents and appropriate fee. The Commission may extend the Phase I review period in exceptional circumstances. 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
If, during the Phase I review, the Commission is unable to conclude that a merger situation does not raise competition concerns and is of the view that a more detailed examination of the merger is required, it will notify the merger parties of the decision to carry out a more detailed assessment (ie, Phase II review). The indicative time frame of 120 working days for a Phase II review commences when the Commission receives a complete Form M2. The Commission may extend the Phase 2 review period in exceptional circumstances.
During the review, 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.
Apart from notifications, the Commission may also investigate a merger arising from a third-party complaint or other sources of information if there are reasonable grounds for suspecting that the section 54 prohibition has been or will be infringed. The Commission may exercise its powers of investigation, which include the right to require the production of specified documents or information, the power to enter premises with or without a warrant, and the power to search premises with a warrant. In the recent amendments to the Competition Act that came into effect on 16 May 2018, the Commission’s powers were widened to enable enforcement officers empowered or authorised to enter any premises for the purposes of an investigation, to conduct interviews with persons on the premises without having to issue a notice under section 63(1) to any of such persons (as currently required). The Commission may also invite comments from interested third parties on the merger situation under investigation through a notice on the Commission’s website.