SINGAPORE Law and Practice Contributed by: Lim Chong Kin and Corinne Chew, Drew & Napier LLC
position, voting or decisions of the organs of an undertaking. The Commission considers that decisive influ - ence is deemed to exist if there is ownership of more than 50% of the undertaking’s voting rights. Where ownership is between 30% and 50% of the undertaking’s voting rights, there is a rebuttable presumption that decisive influ - ence exists. “Voting rights” refers to all the voting rights linked to the share capital of an undertak - ing and currently exercisable at a general meet - ing. That said, control could potentially be estab - lished at levels below these indicative thresholds if other relevant factors (eg, other forms of voting rights) provide strong evidence of control. The Commission may also assess whether a party has de facto control over an undertaking, on a case-by-case basis. There is no precise criterion for determining when an acquirer obtains de facto control. For exam - ple, decisive control may exist where minority shareholders have additional rights that allow them to veto decisions that are essential for the strategic commercial behaviour of the undertak - ing, such as the budget, business plans, major investments, the appointment of senior manage - ment or market-specific rights. The acquisition of a minority shareholding that confers decisive influence over an undertaking could amount to a merger that is reviewable by the Commission. 2.5 Jurisdictional Thresholds The Commission is unlikely to investigate a merger involving only small companies where the following applies in the financial year pre - ceding the merger: • each party’s turnover in Singapore was below SGD5 million; and
• the combined worldwide turnover of all the parties was below SGD50 million. The Commission generally takes the view that competition concerns are unlikely to arise in a merger situation unless the market share of the merged entity will be: • 40% or more; or • between 20% and 40%, and the post-merger market share of the three largest firms is 70% or more. As merger notification is voluntary, the above thresholds set out by the Commission are indic - ative thresholds. Mergers that fall below these thresholds may still be investigated in appropri - ate circumstances, if there is strong evidence of an SLC. Conversely, mergers that meet or exceed the above thresholds are not necessarily prohibited under Section 54 of the Competition Act. Merger parties are encouraged to carry out self-assess - ments as to whether their transaction is likely to lead to an SLC in any market in Singapore and if notification to the Commission is recommended. There are also prescribed notification thresholds in the merger control regimes of some sectors regulated by industry-specific statutes. 2.6 Calculations of Jurisdictional Thresholds The indicative thresholds are calculated on the basis of market shares. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds Market share thresholds are based on how the market is defined and this, in turn, is dependent
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