SINGAPORE Law and Practice Contributed by: Lim Chong Kin and Corinne Chew, Drew & Napier LLC
each year of infringement, up to a maximum of three years. 2.3 Types of Transactions In general, mergers and anticipated mergers that have resulted – or may be expected to result – in an SLC within any market in Singapore will be caught by the Section 54 Prohibition. Internal restructurings or reorganisations and operations not involving the transfer of shares or assets typically would not infringe the Section 54 Pro - hibition. A merger occurs if: • two or more undertakings, previously inde - pendent of one another, merge; • one or more persons or other undertakings acquire direct or indirect control of the whole or part of one or more other undertakings; or • the result of an acquisition by one under - taking (the first undertaking) of the assets (including goodwill), or a substantial part of the assets, of another undertaking (the sec - ond undertaking) is to place the first under - taking in a position to replace or substantially replace the second undertaking in the busi - ness or, as appropriate, the part of the busi - ness in which that undertaking was engaged immediately before the acquisition. While an undertaking’s acquisition of a majority stake in another undertaking is one of the more obvious examples of a merger, the creation of a joint venture through the transfer or pooling of assets may also be subject to the merger provi - sions. A joint venture may constitute a merger if it is created to perform all functions of an auton - omous economic entity on a lasting basis and is subject to joint control; see 2.10 Joint Ventures .
However, certain transactions do not constitute a merger for the purposes of the Competition Act, including: • if the person acquiring control is a receiver or liquidator acting as such, or is an underwriter acting as such; • if all of the undertakings involved in the merger are under the control of the same undertaking, directly or indirectly; • if control is acquired solely as a result of a testamentary disposition, intestacy or the right of survivorship under a joint tenancy; or • if control is acquired by an undertaking whose normal activities include carrying out transac - tions and dealings in securities for its own account or for the account of others under the circumstances specified in Section 54 (9) of the Competition Act. The determination of whether a merger exists is based on qualitative rather than quantitative cri - teria, focusing on the concept of control, which may occur on either a legal or de facto basis. 2.4 Definition of “Control” Control is the ability to exercise “decisive influ - ence” in relation to the activities of an undertak - ing. This requires consideration of all relevant circumstances of the case and not only the legal effect of any instrument, deed, transfer, assign - ment or other act. As provided in Section 54 (3) of the Competi - tion Act, control of an undertaking is deemed to exist if decisive influence is capable of being exercised, particularly by: • ownership of, or the right to use all or part of, the assets of an undertaking; or • rights or contracts that enable decisive influ - ence to be exercised with regard to the com -
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