The Competition Commission of Singapore (CCS) expressed competition concerns over the proposed merger between the maritime products suppliers Wilhelmsen Maritime Services (WMS) and Drew Marine Technical Solutions (DMTS).
On 10 August 2017, WMS applied for a decision by CCS on whether the Proposed Transaction would infringe the prohibition in the Competition Act (Cap. 50B) against anti-competitive mergers.
CCS has completed its Phase 1 review of the proposed acquisition by WMS of sole control over DMTS, based on information furnished by both parties and third-party feedback, underlining that WMS and DMTS overlap in the supply of marine chemicals (cleaning chemicals, water treatment chemicals and fuel oil treatment chemicals), marine gases (welding gases and refrigerant gases) and marine welding equipment.
Namely, according to CSS, the Parties appear to be each other’s closest competitors. Other suppliers may face difficulty achieving sufficient geographic scale to be viable alternative sources of supply and to exert sufficient competitive pressure, especially for customers that procure on a global basis.
“Therefore, the Proposed Transaction may deteriorate the competition in the supply of these products in Singapore, and may lead to price increases, lessen the quality of products and/or service levels,” CSS noted.
At this stage, the parties may accordingly offer commitments to address the potential competition concerns that may arise as a result of the Proposed Transaction, or the merger will proceed to a detailed Phase 2, according to CCS. Commitments may also be offered at any time during a Phase 2 review.