Competition watchdog gives nod to ARA, Logos deal

THE Competition and Consumer Commission of Singapore (CCCS) has cleared the proposed merger between fund manager Logos China Investments and ARA Logistics, a unit of ARA Asset Management.

In a press statement on Thursday, the competition watchdog said it has concluded that the deal will not infringe the Competition Act.

ARA in December announced plans to establish a logistics real estate platform in the Asia-Pacific region with Logos.

Both companies are involved in industrial real estate space for rental, specifically warehouse space, as well as property funds that invest in industrial real estate.

Under the deal, ARA is proposing to acquire Logos shares. ARA will also transfer its entire holdings in Cache Logistics Trust and the trust's manager to Logos, and upon completion, ARA will retain control of the trust manager through Logos.

CCCS said that in its assessment of the deal, the relevant markets affected are the supply of warehouse space for rental in Singapore and the global supply of fund management services for industrial real estate assets.

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For both markets, the combined market share of ARA and Logos is below CCCS's indicative threshold. This suggests that competition concerns are unlikely to arise from the proposed transaction.

Besides, the merged entity will probably continue to face significant competition in the warehouse space market from existing and potential alternative suppliers, the commission said. It noted that barriers to entry and expansion are not high.

Customers are also likely to be able to self-supply warehouse space for rental in Singapore, and counter price increases by ARA and Logos, CCCS added.

As for the global supply of fund management services, it found that both parties are unlikely be each other's closest competitor because their investment portfolios differ in scope.

There is also a large number of fund managers globally available for customers to choose from, and a lack of significant barriers preventing customers from switching service providers, CCCS said.

The competition watchdog launched its public consultation on the proposed deal last month, after receiving an application from ARA Logistics for the authority to assess whether the transaction will breach competition laws.

Cache Logistics Trust units were trading flat at 69.5 Singapore cents as at 11.37am on Thursday.