Competition commission greenlights Fujifilm-CMC Materials KMG Corporation merger

The commission cited four reasons for its financial assessment. 

The Competition and Consumer Commission of Singapore (CCCS) declared that the proposed acquisition by Fujifilm of CMC Materials KMG Corporation (KMG) will not infringe the section 54 prohibition of the Competition Act 2004, which prohibits mergers that have resulted or may be expected to result, in a substantial lessening of competition (SLC) within any market in Singapore.

Under the proposed transaction, Fujifilm will acquire 100% of the issued and outstanding equity interests of the electronic chemicals business of Entegris, Inc., which is operated by KMG. 

KMG is under the ownership of CMC Materials LLC, which is fully owned by Entegris, Inc.

According to CCCS’ assessment, the proposed transaction is unlikely to lead to an SLC in any relevant market considered by the CCCS for the following reasons:

1. The combined market share of the merged entity generally does not cross the indicative thresholds set out in the CCCS Guidelines on the Substantive Assessment of Mergers. Where the merged entity’s market shares exceed the thresholds, the incremental market shares are low; 
2. Fujifilm and KMG are not each other’s closest competitors in the relevant markets, and the merged entity will continue to face significant competition from existing strong competitors post-merger; 
3. Customers generally multi-source and can switch between suppliers with relative ease; and
4. The low price transparency of HPPCs and the qualification process reduce the risk of collusion between market players.