![](/media/8297/singapore_kh_7.jpg?anchor=center&mode=crop&width=1200&height=900&rnd=132609821570000000)
Knowledge Highlights 5 September 2024
On 14 August 2020, the Competition and Consumer Commission of Singapore (“CCCS”) announced the clearance of the proposed acquisition of Bombardier Transportation (Investment) UK Ltd (“Bombardier Transportation”) by Alstom S.A. (“Alstom”) (“Proposed Transaction”) (“Parties”).
CCCS concluded that the Proposed Transaction, if carried into effect, will not 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”). Section 54 of the Act prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.
The Proposed Transaction is the third transaction that CCCS has reviewed relating to the supply of trains for Mass Rapid Transit (“MRT”) lines in Singapore, and the second transaction that CCCS has reviewed relating to the supply of urban signalling systems for MRT lines in Singapore.
The Allen & Gledhill Competition & Antitrust Practice acted for the acquiror, Alstom.
Parties
Alstom, a French corporation, is a global player in the world rail transport industry, providing a full range of solutions (from high-speed trains to metros, trams and e-buses), related services (maintenance and modernisation) as well as offerings dedicated to passengers and infrastructure, digital mobility and signalling solutions.
Bombardier Transportation, a private company incorporated in England and Wales, is the global rail solutions division of its majority shareholder, Bombardier Inc. It offers a wide range of rail solutions, ranging from trains to sub-systems and signalling to complete turnkey transport systems, e-mobility technology and data-driven maintenance services globally.
In Singapore, both Parties supply trains for MRT lines, turnkey solutions for rail transport, urban signalling systems as well as maintenance, repair services and spare parts. Alstom is also involved in MRT system infrastructure including trackwork and third rails for rail electrification. Bombardier Transportation also supplies trains for Light Rapid Transit lines and services related to the supply of communication systems.
Relevant overlaps
In assessing the Proposed Transaction, CCCS considered the relevant markets to be the supply of trains and urban signalling systems for MRT lines in Singapore.
CCCS’s assessment
Supply of trains for MRT lines in Singapore
CCCS found that it is likely that there continues to be sufficient competition post-Transaction and that the Parties are unlikely to be each other’s closest competitor. CCCS’s analysis of past tenders over the last 10 years indicates that there exist a number of suppliers which have participated in tenders, some with win rates and participation rates higher or at least equal to Alstom and Bombardier Transportation. Existing suppliers (including suppliers which have participated in tenders in Singapore before, but have never won) and potential suppliers (i.e. suppliers which have never participated in a tender in Singapore before) are likely to constrain the merged entity’s ability to raise prices.
While barriers to entry and expansion may be significant for new potential suppliers, they are less so for existing suppliers. Further, the presence of countervailing buyer power by the Land Transport Authority (“LTA”) as the sole customer of trains for MRT lines in Singapore could serve to constrain the merged entity’s ability to raise prices.
Supply of urban signalling systems for MRT lines in Singapore
CCCS found that Bombardier Transportation does not have sufficient market share as it has not won any tenders it has participated in Singapore during the reference period. In this regard, there is no incremental increase in the Parties’ combined market share arising from the Proposed Transaction.
Similar to the supply of trains for MRT lines in Singapore, CCCS found that it is likely that there continues to be sufficient competition post-Transaction. In particular, the Parties are unlikely to be each other’s closest competitor. Existing suppliers and potential suppliers are likely to constrain the merged entity’s ability to raise prices. While barriers to entry and expansion may be significant for new potential suppliers, they are less so for existing suppliers. Further, the presence of countervailing buyer power by LTA as the sole customer of urban signalling systems for MRT lines in Singapore could serve to constrain the merged entity’s ability to raise prices.
Reference materials
The following materials are available on the CCCS website www.cccs.gov.sg:
CCCS’s Grounds of Decision will be made available in due course.