24 February 2020

On 19 February 2020, the Competition and Consumer Commission of Singapore (“CCCS”) announced its clearance of the proposed acquisition by SembWaste Pte. Ltd. (“SembWaste”) of 100% of the issued shares of Veolia ES Singapore Pte. Ltd. (“VESS”) (collectively, “Parties”) from Veolia Environmental Services Asia Pte. Ltd. (“Proposed Transaction”). CCCS found that the Proposed Transaction, if carried into effect, will not lead to a substantial lessening of competition within the relevant markets in Singapore and, accordingly, will not infringe section 54 of the Competition Act (“Act”). Section 54 of the Act prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.

CCCS cleared the Proposed Transaction following a public consultation conducted from 15 January to 29 January 2020 where CCCS contacted key stakeholders including competitors and customers to gather relevant information. CCCS also contacted the National Environment Agency (“NEA”) which is the regulator of waste collection services in Singapore. CCCS was notified of the Proposed Transaction by SembWaste on 8 January 2020.

The parties

SembWaste is an integrated solid waste management service provider in Singapore which offers a comprehensive suite of services to municipal, industrial and commercial sectors. VESS’s operations in Singapore include public waste collection (“PWC”) and general waste collection (“GWC”) services.

The Parties overlap in the supply of PWC and GWC services in Singapore.

CCCS’s assessment

In assessing the Proposed Transaction, CCCS considered the relevant markets for PWC and GWC services in Singapore, and concluded that the merged entity would continue to face sufficient competition in the relevant markets from other suppliers in Singapore and overseas.

Specific to the market for PWC services in Singapore, CCCS found that NEA, the sole customer in this market, may have some bargaining power to constrain any increase in market power by the merged entity. Further, the low barriers to entry and expansion means that there remains a number of credible competitors who are capable of expanding to compete with the merged entity. CCCS also found that the merged entity will continue to face competition from the potential entry of local and overseas suppliers.

In the market for GWC services in Singapore, CCCS found that as the combined market share of the Parties is below CCCS’s indicative threshold, competition concerns are unlikely to arise from the Proposed Transaction. CCCS also found that the Proposed Transaction is unlikely to significantly alter the market structure given the low incremental market share arising from the Proposed Transaction. Further, customers are able to switch suppliers as there is a large number of alternative suppliers for customers to choose from. The merged entity will continue to face competition from existing as well as potential local and overseas suppliers.

CCCS’s Grounds of Decision will be made available in due course on its public register.