Feedback sought on Sembcorp's proposed acquisition of Veolia

SembWaste's materials recovery facility in Tuas. The wholly owned unit of Sembcorp Industries has agreed to buy the entire stake in Veolia ES Singapore and the public cleaning arm of Veolia ES Singapore Industrial for about $28 million.
SembWaste's materials recovery facility in Tuas. The wholly owned unit of Sembcorp Industries has agreed to buy the entire stake in Veolia ES Singapore and the public cleaning arm of Veolia ES Singapore Industrial for about $28 million.PHOTO: LIANHE ZAOBAO

Anyone with an opinion on SembWaste's proposed acquisition of Veolia ES Singapore (VESS) can join a public feedback exercise being conducted by the Competition and Consumer Commission of Singapore (CCCS).

SembWaste is a wholly owned unit of Sembcorp Industries while VESS is part of the Veolia group, which provides water, waste and energy management solutions.

SembWaste has agreed to buy the entire stake in VESS and the public cleaning arm of Veolia ES Singapore Industrial for about $28 million.

CCCS said it is assessing whether the deal would infringe on the Competition Act, which prohibits mergers that could substantially lessen competition within any market here.

SembWaste said the buyout is unlikely to result in the merged entity having market power, even though the two firms overlap in providing public and general waste collection services. This is because the merged entity will remain constrained by strong competition from existing competitors and potential entrants, it noted.

It added that there remains a large number of competitors, along with low barriers to entry and the threat of new entrants.

SembWaste also cited "strong buyer power" in the markets.

In public waste collection, the National Environment Agency can likely exercise "significant countervailing buyer power" as the sole purchaser, SembWaste said.

Meanwhile, there is a large pool of suppliers in the general waste collection market and buyers can call for tenders or requests for quotations from licence holders.

The public consultation ends on Jan 29.

A version of this article appeared in the print edition of The Straits Times on January 16, 2020, with the headline 'Feedback sought on Sembcorp's proposed acquisition of Veolia'. Print Edition | Subscribe