26 February 2019

The Competition and Consumer Commission of Singapore (“CCCS”) has cleared the proposed US$7 billion acquisition by Gebr. Knauf KG (“Knauf”) of USG Corporation (“USG”) (collectively, “Parties”) (“Proposed Acquisition”). CCCS assessed that the Proposed Acquisition, if carried into effect, is unlikely to 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”) which prohibits anti-competitive mergers.

CCCS issued the clearance decision on 8 February 2019 following a joint notification from the Parties on 28 August 2018 for a decision on whether the Proposed Acquisition, if carried into effect, would infringe section 54 of the Act.

The Allen & Gledhill LLP Competition & Antitrust Practice acted for Knauf in securing clearance from CCCS.

CCCS’ findings

In assessing the Proposed Acquisition, CCCS considered the relevant markets for (a) the supply of gypsum boards in Singapore, and (b) the global supply of modular suspended ceilings using mineral fibre tiles to Singapore. For the supply of gypsum boards, CCCS found that the post-merger increase in market share is low and the Parties are not each other’s closest competitor. The merged entity will continue to face significant competition from its closest competitor.

As for modular suspended ceilings using mineral fibre tiles, CCCS found that the merged entity will face sufficient competitive constraint from other suppliers in Singapore and overseas. Existing suppliers to Singapore are sufficiently viable competitors to the Parties, and the merged entity also faces a sufficient level of potential competition from established suppliers overseas currently not supplying to Singapore as well suppliers of substitutes who are strong players. End-customers of the Parties are sufficiently able and willing to switch to competing suppliers.

Reference materials

The following materials are available on the CCCS website www.cccs.gov.sg:

 

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