SINGAPORE - The competition watchdog here has issued a provisional decision effectively blocking Parkway Holdings' proposed $137 million takeover of outpatient diagnostic chain RadLink Asia.
In the first decision of its kind in its 10-year history, the Competition Commission of Singapore (CCS) said the deal could result in a "significant lessening of competition" in the affected markets, which would breach Section 54 of the Competition Act.
The CCS said it had written on March 11 to Fortis Healthcare Singapore - the owner of Radlink Asia - and Singapore-listed Parkway indicating its provisional decision to block the deal going ahead.
The fact it is a provisional decision means, for example, the parties involved might come up with another proposal to address the CCS' concerns.
According to CCS, set up in 2005, this is the first time the commission has issued a provisional decision blocking a proposed corporate deal.
Last Friday, Fortis' parent company in India had announced to the Indian stock exchange that it would "continue to explore alternative strategic opportunities related to RadLink".
However, the same day, Malaysian-based IHH Healthcare - parent company of Parkway - indicated the proposed acquisition deal has lapsed. This was disclosed in a statement to the both the Malaysian and Singapore bourses.
In its ruling the CCS said had the deal proceeded, Parkway would have achieved market dominance.
"Post-merger, Parkway would become the only commercial supplier of radiopharmaceuticals in Singapore, through its 33 per cent shareholding of Positron Tracers and the acquisition of 100 per cent of RadLink,'' it said.
"CCS's market inquiries indicated that no potential new radiopharmaceutical supplier would enter the market in the next two to three years to compete with the merged entity."