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Merger Notification Fees

INTRODUCTION

1. Applicants notifying their merger or anticipated merger to the CCS for a decision under section 57 or 58 of the Competition Act (“the Act”) are required to pay a fee. This is provided for in the Competition (Fees) Regulations (“the Regulations”).

2. The fees payable for notification of a merger situation depend on the following:

a. Whether the acquiring party in a merger is a small or medium enterprise (‘SME); and

b. The turnover of the undertaking/assets acquired in the merger situation (or ‘net aggregate turnover’ as defined in the Regulations).

3. The Regulations define an SME as:[1]

a. an undertaking in the manufacturing sector having a fixed asset investment of less than $15 million; or

b. an undertaking in the non-manufacturing sector having less than 200 employees.

MERGER NOTIFICATION FEES

4. For the following merger situations involving SMEs, the fee payable is a standard $5,000[2]:

a. In the case of a merger situation under s.54(2)(a) of the Act, where all the merging undertakings are SMEs; or

b. In a merger situation under s.54(2)(b) or (c) of the Act involving the acquisition of undertakings or assets, where the acquiring party is an SME and there is no acquisition of direct or indirect control of the SME arising from the transaction.

5. In most of the merger situations falling under paragraph 2(b) above, the fees will be based on the turnover of the target undertaking or turnover attributed to the acquired asset. The fees for cases for these situations are as follows:[3]

Description

Amount of fees

Where the turnover of the target undertaking or turnover attributed to the acquired asset is equal to or less than $200 million

$15,000

Where the turnover of the target undertaking or turnover attributed to the acquired asset is between $200 million and $600 million

$50,000

Where the turnover of the target undertaking or turnover attributed to the acquired asset is above $600 million

$100,000

6. The following are illustrations of how the notification fees will be computed under various merger situations. More information can be found in the Regulations.

Illustration A

Company A (whose entire business comprises asset A1) acquires Company B (whose entire business comprises assets B1 and B2).

The fee is based on the turnover of the acquired undertaking Company B.

Illustration B

Company C (whose entire business comprises asset C1) acquires Company D (whose entire business comprises asset D1), which in turn controls all the voting rights in Company E (whose entire business comprises asset E1).

Company C has acquired Company E through its acquisition of Company D. The fee is based on the turnover of the acquired undertakings, Company D and Company E.

Illustration C

Company G (whose entire business comprises asset G1) amalgamates with Company H (whose entire business comprises asset H1). The owners of Company G and Company H each have a 50% stake in the merged entity.

The fee is based on the turnover of either Company G or Company H, whichever is the lower turnover. If either company is owned by another undertaking which has not undergone a change in control as a result of the amalgamation, the turnover will generally be the sum of the turnovers of both Company G and Company H.

Illustration D

Company L (whose entire business comprises asset L1) enters into a joint venture with Company M (whose entire business comprises asset M1). The two companies transfer assets L1 and M1 to a shell joint venture company, which they own in the proportion 50:50.

The fee is based on the turnover of either Company L or Company M, whichever is the lower turnover. If either company is owned by another undertaking which has not undergone a change in control as a result of the amalgamation, the turnover will generally be the sum of the turnovers of both Company L and Company M.

More Information on the Regulations

7. For more complex merger permutations, parties could look at the Regulations for further guidance. The Regulations calculate the net aggregate turnover as the sum of the applicable turnovers (i.e. sales) of all relevant assets and deducting either

a. the applicable turnover of any relevant asset which will continue immediately after the merger to be carried on under the same control as immediately before the merger; or

b. if no relevant asset will continue to be carried on under the same control, the applicable turnover of the relevant asset with the highest applicable turnover, compared to that of all the other relevant assets.

8. More information on the concept of “relevant asset”, “applicable turnover” and “control” can also be found in the Regulations . The Regulations also define the relevant period for calculation of turnover.

9. Merger parties, who have queries on the fees payable for their merger notifications, may contact the CCS at ccs_mergers@ccs.gov.sg or raise this in their request for a Pre-Notification Discussion.

[1] Paragraph 2 of the First Schedule of Competition (Fees) Regulations.

[2] Paragraph 3(a) of the First Schedule of Competition (Fees) Regulations

[3] Paragraph 3(b) of the First Schedule of the Regulations.