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Singapore competition panel to seek public feedback on acquisition of OldTown by Dutch peer
THE Competition Commission of Singapore (CCS) will be gathering public feedback on the upcoming acquisition of Malaysian coffee company OldTown by Dutch tea and coffee giant Jacobs Douwe Egberts (JDE) from Dec 21, 2017 to Jan 5, 2018.
In a release, the commission said that it was notified of the proposed transaction on Dec 18, in which JDE will acquire the entire issued and outstanding share capital of Bursa Malaysia-listed OldTown through its wholly owned indirect subsidiary JDE Asia.
JDE is offering RM3.18 per share for the operator of OldTown White Coffee chain through JDE Asia, the companies said in a statement on Dec 18.
The offer will be conditional once JDE receives acceptances from shareholders that will result in it holding more than 50 per cent of all OldTown shares, and post-transaction JDE plans to delist OldTown and privatise it.
According to the Dec 18 statement, 51.45 per cent of OldTown shareholders have accepted the offer.
JDE had applied to the commission for a decision as to whether the proposed deal would contravene anti-competitive measures in the Competition Act, which "prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition in Singapore".
JDE has said that the acquisition "will not result in a substantially lessening of competition in any market in Singapore".
The Dutch company said that the JDE group and OldTown overlap in the sale of instant coffee mixes and other instant beverages in the local market, which is highly competitive "given that existing and potential competing global instant coffee and tea manufacturers are able to, and do, supply and distribute instant coffee and tea products in Singapore".
It added that manufacturers and sellers of instant coffee and tea products would continue to be constrained by large intermediate customers even after the acquisition, and it was also very difficult for competing brands to coordinate as constant innovation is required in order to keep up with evolving trends.
OldTown White Coffee has 232 outlets, including 189 stores in Malaysia and nine in Singapore. The others are spread across Indonesia, Australia, China, Hong Kong and Myanmar.