Proposed Joint Venture between The Boeing Company and SIA Engineering Company Limited

Notifying Parties

The Boeing Company; SIA Engineering Company Limited

Notifying Date

28 November 2014

Summary of Transaction

PART 5

INFORMATION FOR THE CCS PUBLIC REGISTER

(TO BE COMPLETED BY THE APPLICANT(S))

Please provide a comprehensive, non-confidential summary of the merger including at least the following information:

(i)              the names of the merger parties;

·                     The Boeing Company (“Boeing”); and

·                     SIA Engineering Company Limited (“SIAEC”).

(ii)              a description of the transaction;

This is a joint notification made by Boeing and SIAEC in relation to a joint venture which will be incorporated in Singapore.  Boeing Singapore, a wholly owned subsidiary of Boeing, and SIAEC, a subsidiary of SIA, intend to set up a JV to offer maintenance, repair, overhaul (“MRO”) services together with related engineering, logistics and supply chain and inventory management services with respect to specific aircraft manufactured by Boeing, to both SIA group customers and other third party customers primarily based in the South Asia Pacific region (the “Proposed Transaction”).

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

Boeing is the leading manufacturer of commercial jetliners and military aircraft. Boeing is also active in the business of designing and manufacturing rotorcraft, electronic and defence systems, missiles, satellites, launch vehicles and advanced information and communication systems. Boeing also provides numerous military and commercial airline support services to its various customers in 150 countries.

Boeing offers a broad range of capabilities, which include creating new, more efficient commercial airplanes; integrating military platforms, defence systems and the warfighter through network-centric operations; creating advanced technology solutions that reach across business units; e-enabling airplanes and providing connectivity on moving platforms; and arranging financing solutions for its customers.

In addition, Boeing provides assistance and services to facilitate efficient and safe aircraft operation to the operators of all its commercial airplane models. Collectively known as fleet support services, these activities and services include flight and maintenance training, field service support, engineering services, and technical data and documents. Services provided after delivery include, field service support, consulting on maintenance, repair, and operational issues brought forth by the customer or regulators, updating manuals and engineering data, and the issuance of service bulletins that impact the entire model’s fleet. Field service support involves personnel located at customer facilities providing and coordinating fleet support activities and requests.

SIAEC provides MRO services for aircraft, engine and related components to its customers. Specifically, the service offerings of SIAEC include aircraft maintenance and overhaul, line maintenance and technical handling, component maintenance and overhaul, fleet management programme, engine overhaul, passenger-to-freighter conversion, cabin modifications, training academy; and aircraft painting.

SIAEC is party to 26 joint ventures with strategic partners and original equipment manufacturers in Australia, China, Indonesia, Ireland, Philippines, Singapore, Taiwan, U.S., and Vietnam.

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

Boeing and SIAEC consider the relevant product markets for the purposes of this notification to be the markets for the provision of line maintenance, heavy maintenance, and component maintenance for commercial aircraft.

(v)              a description of substitute goods or services;

Boeing and SIAEC consider each of the MRO services as highly specialised in nature. Accordingly, there are unlikely to be any substitutes to MRO services.

(vi)             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 markets are the Singapore market for line maintenance, the worldwide market for heavy maintenance, and the worldwide market for component maintenance.

The Proposed Transaction will not result in a substantial lessening of competition in either market in view of factors, including the following:

Non-coordinated effects

(a)           the multitude of competitors that currently exists in the relevant markets;

(b)           the ability of customers to easily switch between suppliers; and

(c)           the ease and likelihood of entry by potential competitors into the relevant markets;

Coordinated effects

(d)           the multitude and competitive strengths of viable alternative suppliers; and

(e)           barriers of entry are not unduly restrictive, and the likelihood of entry of potential competitors which creates disruptive effects and reduces sustainability of any coordinated behaviour.

Decision

The Proposed Transaction, if carried into effect, will not infringe the section 54 prohibition

Decision date

3 February 2015

Please click here for the decision and here for the media release.