Namely, on 12 September 2019, CCCS accepted an application from KSOE for a decision on whether the Proposed Transaction infringes section 54 of the Competition Act (Cap. 50B), which prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.

KSOE and DSME overlap in the supply of commercial vessels, including oil tankers, container ships, LNG carriers and LPG carriers. Both companies operate in Singapore as foreign companies registered in Singapore.

In an official statement in 29 November, CCCS said it has raised competition concerns with KSOE on the Proposed Transaction, based on information furnished by KSOE and feedback from third parties.

Third party feedback suggests that the Parties are currently two of the largest suppliers for the global supply of LNG carriers, and possibly large container ships and large oil tankers.

There are concerns that the Proposed Transaction will remove competition between two main suppliers of these commercial vessels, to the detriment of customers in Singapore.

Meanwhile, data from VesselsValue suggest that the merger is expected to boost the orderbook of LNG vessels.

Feedback also revealed concerns on whether alternative suppliers will be sufficiently strong competitors to the merged entity.

Additionally, there are concerns that the barriers to entry and expansion, particularly in relation to more sophisticated vessels such as LNG carriers, may be high.

At this stage, the Parties may offer commitments to address the potential competition concerns that may arise as a result of the Transaction, or the merger will proceed to a detailed Phase 2 review upon CCCS’s receipt of the relevant documents from KSOE. Commitments may also be offered at any time during a Phase 2 review.

A Phase 2 review entails a more detailed and extensive examination of the merger situation. While the principles of substantive assessment are the same, CCCS will require access to more extensive and detailed information regarding the merger parties and the markets in question.

CCCS will endeavour to complete a Phase 2 review within 120 business days.

Last week, China officially announced the launch of the "China Shipbuilding Group", resulting from the merger between the country’s two largest shipbuilders, China State Shipbuilding Corp and China Shipbuilding Industry Co., which the country's state broadcaster commented as the world's largest shipbuilder.