Proposed Acquisition by Fincantieri – Cantieri Navali S.p.A. of STX OSV Holdings Limited

Notifying Parties:

Fincantieri – Cantieri Navali S.p.A. and STX OSV Holdings Limited

Notifying Date:

16 January 2013

Summary of Transaction: 

PART 5
INFORMATION FOR THE CCS PUBLIC REGISTER
(TO BE COMPLETED BY THE APPLICANT(S))

 (i)           the names of the merger parties;

-   Fincantieri - Cantieri Navali S.p.A. (“Fincantieri”); and

-   STX OSV Holdings Limited (“STX OSV”).

 (ii)           a description of the transaction;

Fincantieri, through its wholly-owned and newly-established subsidiary, Fincantieri Oil & Gas S.p.A. (“Fincantieri Oil & Gas”), will acquire 50.75 per cent. of the issued share capital of STX OSV from STX Europe AS, following which Fincantieri Oil & Gas is required to make a mandatory cash offer for all outstanding shares of STX OSV, other than those already owned, controlled or agreed to be acquired by Fincantieri Oil & Gas, in accordance with Section 139 of the Securities and Futures Act, Chapter 289 of Singapore, and Rule 14 of the Singapore Code on Take-overs and Mergers (the “Acquisition”).

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

Fincantieri, an Italian joint-stock company, has diversified shipbuilding activities in the worldwide markets of commercial and naval ships. Fincantieri is presently active in the design and construction of merchant ships and non-nuclear naval vessels (including aircraft carriers, frigates, and submarines), and mechanical components (e.g. pitch propellers, shaft lines, fin stabilisers, steering gears, tunnel thrusters, and turbines).

Fincantieri designs, builds, and markets different kinds of ships, such as cruise and ferry, naval ships, mega yachts, marine systems and provides repair/maintenance and refitting services.

The network of shipyards operated by Fincantieri includes eight in Italy, three in the U.S.

STX OSV is a global shipbuilder manufacturing offshore and specialised vessels used in offshore oil and gas exploration and production, and oil service industries. STX OSV operates mainly through its shipyards, of which nine are operating and one under development in Brazil, strategically located near offshore oil and gas markets. Of the nine operating shipyards, five are located in Norway, two in Romania, and one each in Vietnam and Brazil.

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

The Parties overlap generally in the overall market for commercial shipbuilding, ship repair, and ship conversion. There are, however, no horizontal overlaps between the Parties within narrower segments, defined by the specific vessels supplied, within the general market.

Within commercial shipbuilding, the Parties respectively supply the following globally:

                          Good/service
Fincantieri         (a) Cruise ships.

STX OSV            (a) Offshore/specialised vessels; and
                          (b) Liquefied Petroleum Gas (“LPG”) vessels.

(v)           the applicant’s views on:

a.             definition of the relevant market(s);

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

c.             barriers to entry and countervailing buyer power; and

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

The Parties submit that the relevant product market for the purposes of this notification is the market for commercial shipbuilding, which is worldwide in geographic scope.

The Parties submit that the Acquisition will not result in a substantial lessening of competition, in view of the following:

(a)     the Parties do not generally overlap in the building of the same types of vessels, and within commercial shipbuilding globally, the Acquisition does not exceed the CCS Indicative Thresholds;

(b)     there are a multitude of competitors offering commercial vessels, with presence in both the Asian region and globally;

(c)     the commercial shipbuilding market is not characterised by insurmountable entry barriers;

(d)     customers to the Parties are large sophisticated companies who typically run large-scale operations on a global basis;

(e)     competition for commercial shipbuilding is intense, and typically takes place by way of tender; and

(f)     customers are able to easily switch between suppliers.

Decision:

The proposed merger, if carried into effect, will not infringe the section 54 prohibition.

Decision Date:

28 February 2013
Click here for the decision.