CCCS approves Sembcorp unit's acquisition of Veolia ES Singapore

SEMBCORP Industries has got the nod from the Competition and Consumer Commission of Singapore (CCCS) to proceed with the acquisition of Veolia ES Singapore (Vess), it said on Wednesday.

With clearance from the CCCS, the deal is on track for final completion, subject to remaining conditions precedent including other regulatory approvals.

In January, Sembcorp announced that wholly-owned waste management arm SembWaste had entered into an agreement to purchase the entire stake in Vess and the public-cleaning business of Veolia ES Singapore Industrial for about S$28 million.

Vess's operations in Singapore include public waste collection and general waste collection services, overlapping with SembWaste.

However, the CCCS has assessed that the merged entity would continue to face sufficient competition in the relevant markets from other suppliers in Singapore and overseas.

In Singapore, the National Environment Agency is the sole customer in the market for public waste collection, which suggests that it may possess some bargaining power to constrain any increase in market share by the merged entity, the CCCS found.

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"Given that barriers to entry and expansion are not high, there remains a number of credible competitors who are capable of expanding in this market to compete with the merged entity," it added.

As for general waste collection services, the combined market share of SembWaste and Vess is below the CCCS's indicative threshold, which suggests that competition concerns are unlikely to arise from the merger, it said.

Customers are also able to switch suppliers and have a large number of alternative suppliers to choose from, noted the CCCS.

Sembcorp Industries shares closed flat at S$2.04 on Wednesday.