Competition watchdog rejects merger of 2 maritime suppliers

The merger will give the new company a 'substantial' market share that could wipe out potential competition.

The Competition and Consumer Commission of Singapore (CCCS) ruled that the merger between Wilhelmsen Maritime Services (WMS) and Drew Marine’s technical solutions, fire, safety and rescue businesses (DMTS) will be anti-competitive in the market for the supply of marine water treatment chemicals.

The section 54 of the Competition Act prohibits such anti-competitive mergers.

Following the findings, WMS and DMTS are given 10 working days to appear before CCCS. From there, the agency will decide whether to issue a favourable or unfavourable decision, after consideration of the representations.

CCCS has provisionally found the combined market share of the two companies in Singapore’s supply of marine water treatment chemicals is ‘substantial.’ Meanwhile, the next largest competitor has less than one-twentieth of the combined market share of WMS and DMTS.

“Given the sensitivity of marine equipment, a consistent and reliable supply of marine water treatment chemicals is particularly critical,” CCSS said.

The agency added that in contrast to other suppliers, both companies are able to supply their products globally, and have sufficient stock availability across a range of products that enable them to respond quickly to the delivery needs of their customers’ vessels calling at these ports.

It was in August 2017 when CCSS was notified that the merger might infringe the provision of the Competition Act.