City Energy's proposed acquisition will not infringe competition law
The parties concerned are not each other's closest competitor.
The Competition and Consumer Commission of Singapore (CCCS) cleared the proposed acquisition of City Energy, a trustee of SGX-listed City Energy Trust.
In a statement, CCCS concluded that if the proposed sale proceeds, it will not infringe the Section 54 prohibition of the Competition Act 2004 or may be expected to result, in a substantial lessening of competition within any market in Singapore.
On May 30, CCCS accepted an application from City Energy whether the proposed transaction will infringe on the law.
Here are the reasons why it does not infringe on the law:
a.) The Parties are not each other’s closest competitor and there are other LPG competitors of similar or larger size than TSH that would continue to constrain the merged entity;
b) Coordination between competitors in the Relevant Markets is unlikely to arise as the Proposed Transaction does not reduce the number of LPG retailers, which are the closest competitors to TSH in the Relevant Markets;
c) City Energy’s price and terms of supply are transparent to all fuel retailers and customers, and there is no additional information made available to competing suppliers from the Proposed Transaction such that it becomes easier for competitors to collude; and
d) The Parties are unlikely to tie or bundle the supply of LPG and town gas as the different fuel types are not typically purchased in a bundle. Furthermore, there are license conditions imposed on City Energy’s town gas business that prevent it from unfairly using its town gas business to disadvantage its competitors supplying other fuel types.