30 October 2018
The Competition and Consumer Commission of Singapore (“CCCS”) has cleared a proposed joint venture between two global manufacturers and suppliers of hearing aids and hearing accessories (“Proposed Transaction”) and concluded that the prohibition in section 54 of the Competition Act is not infringed. Following notification of the Proposed Transaction on 3 September 2018, CCCS conducted a public consultation to invite feedback from 5 September 2018 to 19 September 2018. CCCS announced the clearance decision on 12 October 2018.
The Allen & Gledhill Competition & Antitrust Practice represented the parties, and secured the unconditional clearance decision within the CCCS’ Phase 1 assessment process, with no stoppages to the administrative clock.
Proposed Transaction and parties involved
The Proposed Transaction involves the creation of a full function joint venture which will combine the activities of Sivantos Pte. Ltd. (Singapore) (“Sivantos”) and Widex A/S (“Widex”) together with their respective subsidiaries. Sivantos and Widex are subsidiaries of EQT Fund Management S.à.r.l. (“EQT”) and Widex Holding A/S (“Widex Holding”), respectively. The notification to the CCCS on 3 September 2018 was jointly filed by EQT and Widex Holding.
In Singapore, Sivantos and Widex overlap in the supply of traditional hearing aids, and in the provision of complementary accessories, fitting software and smartphone applications, and associated after-sales support, such as warranty support and servicing.
For the purpose of CCCS’ competition assessment, the relevant market was for the supply of traditional and body-worn hearing aids (including accessories and services that are intrinsically linked to the supply of hearing aids) in Singapore
as the relevant market for the purpose of the competition assessment.
In reaching the conclusion that the Proposed Transaction, if carried into effect, would not lead to a substantial lessening of competition within the relevant market, CCCS considered the following factors:
- Competing suppliers have a significant presence in Singapore and recent market entrants were able to gain significant market shares quickly.
- Sivantos and Widex are not each other’s closest competitor. There are also differences in perceptions of branding and innovation and in pricing between the traditional hearing aid products of the two parties.
- Third party feedback suggests that there will be no great difficulty switching suppliers because there are sufficient alternative suppliers of traditional hearing aids.
- The barriers to entry and expansion for an existing supplier of traditional hearing aids in other geographical markets are likely to be lower compared to that for a new supplier. For a new supplier of traditional hearing aids, the barriers to entry and/or expansion are not insurmountable based on recent new entrants into Singapore.
The following materials are available on the CCCS website www.cccs.gov.sg:
- Media release
- Public Register: Proposed Joint Venture by EQT Fund Management S.à r.l. and Widex Holding A/S