On 22 February 2023, the Competition and Consumer Commission of Singapore (“CCCS”) cleared the proposed acquisition by Netherlands-based investment holding company AI PAVE Dutchco I B.V. (“Advent Topco”) of Germany-registered GfK SE (“GfK”) (collectively, “Parties") (“Proposed Transaction”). Following the completion of the Proposed Transaction, GfK will be a wholly-owned, indirect subsidiary of Advent Topco and will have a combined business with another wholly-owned subsidiary of Advent Topco, NielsenIQ (“NIQ”) which is based in the United States. NIQ and GfK are in the same business of providing market research services but to clients in different sectors. NIQ’s focus is on clients in the fast-moving consumer goods (“FMCG”) sector, and GfK focuses on clients in the non-FMCG market.
CCCS’s clearance decision follows a public consultation from 9 to 23 November 2022 after the Parties’ joint notification to CCCS on 31 October 2022 for a decision on whether the Proposed Transaction would infringe section 54 of the Competition Act 2004 (“section 54”). Section 54 prohibits mergers which have resulted, or may be expected to result, in a substantial lessening of competition (“SLC”) within any market in Singapore.
A&G acting as counsel
The Allen & Gledhill Competition & Antitrust Practice is acting as antitrust counsel and joint representative to the Parties for the notification to CCCS.
CCCS’s assessment and conclusion
In Singapore, NIQ provides (i) customised market research (“CMR”) services, (ii) retail measurement services (“RMS”) for the FMCG market, and (iii) consumer panel services. GfK provides (i) CMR services, (ii) RMS for the non-FMCG market, and (iii) media consumption measurement services in Singapore.
As GfK and NIQ provide CMR services in Singapore, CCCS focused on the impact of the Proposed Transaction on competition in the market for CMR services (“Relevant Market”).
CCCS concluded that the Proposed Transaction, if carried into effect, will not lead to an SLC in Singapore in the Relevant Market due to the following:
- As the Relevant Market is fragmented with a diverse and wide range of large and small suppliers, customers can switch from one CMR service provider to another without difficulty. Customers can also negotiate with CMR service providers on price and terms of service.
- The fragmented nature of the Relevant Market also means that the Parties are unlikely to hold significant market power as the post-merger market shares of the Parties are likely to be low.
- The barriers to entry and expansion are likely to be low as a new entrant and/or existing competitor would generally be able to acquire the necessary capabilities to work on CMR projects. Further, service providers can outsource fieldwork to other providers and offer competitive prices to customers.
- Due to limited transparency in the procurement process, collusion between competing CMR service providers is unlikely. Customers are also able to switch between CMR service providers and source for new providers easily.
- The Parties are unlikely to tie or bundle CMR services with other forms of research services given the lack of ability and incentive to do so.
Although NIQ and GfK also provide RMS in Singapore, CCCS noted that the target market is different. After receiving third party feedback during the public consultation, CCCS assessed that RMS for FMCG and RMS for non-FMCG are two distinct product markets and accordingly, there is no horizontal overlap between NIQ and GfK in respect of RMS.
The following materials are available on the CCCS website www.cccs.gov.sg: