SINGAPORE - BreadTalk Group's proposed acquisition of Food Junction Management will not result in the lessening of competition within the foodcourt market in Singapore, the Competition and Consumer Commission of Singapore (CCCS) has found.

The competition watchdog said in a statement on Tuesday (Oct 15) that the proposed transaction, which would see BreadTalk's subsidiary, Topwin Investment Holding, acquire foodcourt operator Food Junction for $80 million will not infringe the Competition Act.

BreadTalk operates 14 foodcourts in Singapore and two in Malaysia under the Food Republic and Food Opera brands as at the end of June.

CCCS conducted a public consultation and contacted stakeholders such as food vendors and consumers as part of its assessment of the acquisition. Most of these stakeholders had no concerns with the proposed transaction, it said.

In the statement, the commission said that the combined market share post-merger would remain below 20 per cent, which is considerably lower than larger foodcourt operators like NTUC Kopitiam and Koufu.

"The merged entity may instead be able to better compete with the other larger foodcourt operators post-merger," it noted.

The two parties may not be each other's closest competitor as there is considerable competition with other foodcourt operators as well, CCCS added.

The commission said that collusion between foodcourt operators is unlikely due to the number of competing operators operating foodcourts with different cost structures, the low degree of transparency on the rental fees charged by landlords which makes it difficult for foodcourt operators to monitor one another's costs, and the low barriers to entry and expansion.

CCCS also found that the two operators only directly sell hot meals in a limited number of stalls located within the foodcourt premises, and they will continue to compete with stalls run by third-party vendors after the proposed transaction.

Food quality and variety offered are also unlikely to be reduced post-transaction as shopping mall operators place emphasis on differentiation of foodcourt concepts.

Mall operators also "retain sufficient control over the prices, quality and choices of food" in the foodcourt premises as they seek higher customer footfall in their malls, CCCS said.