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Competition and Consumer Commission of Singapore
Notification | Anticipated Merger Abandoned

Proposed Acquisition by Wilhelmsen Maritime Services AS of Drew Marine

15 August 2017

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Reference

CCS 400/004/17

Notifying Party

Wilhelmsen Maritime Services AS

Notifying Date

10 August 2017

Summary of Transaction

(i)            the names of the merger parties;

  • Acquiror: Wilhelmsen Maritime Services AS (“WMS”)

  • Sellers: Drew Marine Group Coöperatief U.A. and Drew Marine Partners L.P. (collectively “Drew Marine”)

  • Target: Drew Marine’s technical solutions, fire, safety and rescue businesses (collectively “Drew Marine Technical Solutions” or “DMTS”)

(ii)            a description of the transaction;

This sole notification by WMS relates to the acquisition of sole control over DMTS by WMS.

(iii)           a description of the business activities of the merger parties worldwide and in Singapore;

WMS is a global provider of standardised product brands and service solutions to the maritime industry, focusing on marine products, marine chemicals and gases, maritime logistics, ship agency and ship management services.

DMTS supplies a range of chemicals (water treatment, fuel oil treatment and cleaning chemicals), gases (welding gases and refrigerants) and equipment (e.g. welding equipment and fire, safety and rescue equipment) to the maritime sector.

According to WMS, DMTS and WMS provide the same services in Singapore as they do worldwide.

(iv)           a description of the overlapping goods or services, including brand names;

WMS submits that DMTS and WMS overlap in the supply of marine chemicals (cleaning chemicals, water treatment chemicals and fuel oil treatment chemicals), marine gases (welding gases and refrigerants), and other consumables and equipment (e.g. welding equipment).

(v)            a description of substitute goods or services;

According to WMS, substitute products are supplied by a range of other suppliers in Singapore.

(vi)           the applicant’s views on:

a.             definition of the relevant market(s);

The relevant product markets for the purpose of this notification are the markets for (i) industrial and marine chemicals; (ii) industrial and marine gases; and (iii) other consumables and equipment. The relevant geographic markets for the purpose of this notification are at least Singapore-wide in scope.

b.            the way in which competition functions in this market;

The drivers of customer choice from an end-user perspective include price, access to standardised and quality products, the ability to service multiple ports and, to a lesser extent, reputation (including perceived reliability) and the availability of customer/technical support, if required.

c.             barriers to entry and countervailing buyer power; and

The barriers to entry and expansion in the relevant markets are low, due to the increasingly commoditised nature of the products, the possibility of entering a new geographic sector without a physical presence and readily available sales and technical support staff with the necessary experience. A new player could enter and compete in any of the relevant sub-segments in as little as six to 12 months.

d.            the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant).

Non-coordinated effects will not arise in the relevant markets given the intense competition from large, well-established international players, low barriers to entry and expansion, and constant pricing pressure exerted on DMTS and WMS by customers given the ease of switching.

Coordinated effects will not arise in the relevant markets due to the large number of competing suppliers, the lack of focal points with regard to products, the nature of the products in question, the large number of competitors, intense customer negotiation practices, the limited prevalence of bidding processes, and low entry barriers.

There are no existing vertical relationships between DMTS and WMS, and no vertical concerns arise.  


Status

The Competition and Consumer Commission of Singapore ("CCCS") has issued a Statement of Decision (Provisional) to the merger parties on 25 May 2018. CCCS's provisional decision finds that the proposed acquisition by WMS of sole control over DMTS (the "Proposed Transaction") is likely to result in a subtantial lessening of competition in the market for the supply of marine water treatment chemicals (including ancillary materials and services) in Singapore, thereby infringing section 54 of the Competition Act (Cap. 50B) which prohibits anti-competitive mergers. For more details, read the media release (opens in new tab).

On 30 July 2018, in view of the termination of the Proposed Transaction, and WMS's withdrawal of its pending notification, CCCS has ended its assessment of the Proposed Transaction. For more details, read the media release (opens in new tab).

Status Date

30 July 2018