SINGAPORE Law and Practice Contributed by: Lim Chong Kin and Corinne Chew, Drew & Napier LLC
from the merger parties and, in most cases, will be part of the acquired enterprise. The sale should be completed within a specified period, subject to the Commission’s approval of the buyer. This is to ensure that the proposed buyer has the necessary expertise, resources and incentives to operate the divested business as an effective competitor in the marketplace. Otherwise, it is unlikely that the proposed dives - titure will be an effective remedy for the anti- competitive elements identified. In appropriate cases, the Commission will also consider other structural or quasi-structural remedies, such as the divestment of the buyer’s existing business (or part of it) or an amendment to intellectual property licences. The Commis - sion must approve the buyer before the sale to ensure that the buyer is able to act as an effec - tive competitor in the market. Behavioural Remedies The Commission will consider behavioural rem - edies in situations where divestment is consid - ered to be impractical or disproportionate to the nature of the concerns identified. In some cases, behavioural remedies may also be necessary to support structural divestment. In determining which remedies would be appro - priate and comprehensive, the Commission will take into account how effectively the action would prevent, remedy or mitigate the competi - tion concerns caused by the merger. The Com - mission’s starting point will be to choose the remedial action that will restore the competition that has been – or is expected to be – substan - tially reduced as a result of the merger. Given that the effect of a merger is to change the struc - ture of the market, remedies that aim to restore all or part of the pre-merger market structure are
likely to be a more direct way of addressing the adverse effects, although other remedies may be considered in view of the associated costs and effectiveness. 5.3 Legal Standard When deciding on the appropriate remedy, the Commission will consider the effectiveness of different remedies and their associated costs, and will have regard to the principle of propor - tionality. 5.4 Negotiating Remedies With Authorities As the Commission may accept commitments at any time before making its decision, parties can generally propose commitments at any time during the Commission’s review or investigation. While merger parties are encouraged to take the initiative to propose commitments that they think may be appropriate to meet any competi - tion concerns, the Commission may also invite merger parties to consider whether they want to offer commitments. Phase 1 and 2 Reviews If the Commission identifies competition con - cerns in Phase 1 which indicate that a Phase 2 review may be appropriate, those concerns will be communicated to the applicant(s) in writ - ing through an issues letter. This presents the applicant(s) with a final opportunity to propose commitments to address these concerns in Phase 1. Towards the end of Phase 2, if the Commission reaches a preliminary view that the merger is likely to give rise to an SLC, it will issue a State - ment of Decision (Provisional), which may outline remedies that the Commission considers appro - priate. Parties will be given a final opportunity to respond and propose commitments.
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