Hanwha secures approval of acquisition Daewoo Shipbuilding & Marine Engineering
The acquisition will not contravene the Competition Act 2004 which prohibits mergers that could substantially lower competition.
The Competition and Consumer Commission of Singapore (CCCS) approved the acquisition scheme of Daewoo Shipbuilding & Marine Engineering by the Hanwha Group of companies.
According to CCCS, the procurement plan does not violate section 54 prohibition of the Competition Act 2004. This act prevents mergers that could result in the substantial lessening of competition (SCL) within the Singapore market.
The CCCS consulted with competitors and customers of both Hanwha Group and DSME, which was conducted last 20 January to 3 February, after Hanwha Corporation submitted an application to CCCS to determine whether the proposed transaction is lawful.
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It was decided that the transaction proposal will “unlikely lead to an SLC” in the relevant markets operating in Singapore.
The CCCS identified that Hanwha Group is “not a major supplier in the relevant upstream markets.” Also, customer foreclosure is unlikely to happen due to larger competitors present compared with the DSME in the relevant downstream markets that could continue obtaining suppliers in the relevant upstream markets.
Lastly, the CCCS said that the acquisition “will not reduce the number of existing players or increase barriers to entry such that it becomes easier for players in each of the relevant markets to collude.”