The Competition and Consumer Commission of Singapore (CCCS) has cleared the proposed acquisition of Dyna-Mac Holdings NO4 by Hanwha Ocean SG Holdings, turning the Korean conglomerate's offer for the Mainboard-listed company "unconditional in all respects". Hanwha's offer for Dyna-Mac turned unconditional with acceptances on Nov 5 after its stake in Dyna-Mac went above 50%.
CCCS has assessed that the proposed transaction, if carried into effect, will not infringe Section 54 prohibition of the Competition Act 2004, which prohibits mergers that may substantially lessen competition within any market in Singapore.
CCCS began reviewing Hanwha’s application for a decision on whether the Proposed Transaction would infringe Section 54 of the Act on Oct 3. CCCS conducted a public consultation from Oct 4 to 18 and sought feedback from various stakeholders, including competitors and customers of Hanwha and Dyna-Mac. Most respondents did not raise any concerns.
Hanwha, through Hanwha Ocean, will engage in the construction of offshore plants, which include production facilities such as floating production storage and offloading vessels and drilling rigs. Topside modules, which Dyna-Mac supplies, are input components in the production of offshore plants. As a result, Hanwha can potentially use Dyna-Mac’s topside modules in their construction of offshore plants.
Given the potential supplier-customer relationship between the parties, CCCS’s assessment focused on the risk of input foreclosure, that is, whether competition will be adversely affected in the downstream market for offshore plants. This might happen if the parties restrict the supply of Dyna-Mac’s topside modules (an upstream input) to rival downstream suppliers of offshore plants.
CCCS concluded that the Proposed Transaction is unlikely to lead to a substantial lessening of competition in the supply of offshore plants.
See also: Broadway Industrial Group offer turns unconditional; offer will now close on Dec 23
As at Nov 15, Hanwha and its concert parties own 1,055,330,396 shares in Dyna-Mac, representing an 84.67% stake in the latter's total share capital.
The offer will remain open till 5.30pm on Nov 20.
Shares in Dyna-Mac closed flat at 66.5 cents on Nov 15.
See also: Amos Group loses free float; offer to close on Nov 21
See also:
- Hanwha Group makes tender offer of 60 cents per share for Dyna-Mac (update)
- ZICO Capital appointed as IFA for Dyna-Mac's offer
- Estate of Dyna-Mac’s founding shareholder does not find Hanwha’s cash offer compelling
- Hanwha Group explains rationale behind Dyna-Mac’s offer price
- Standoff as Hanwha keeps 60 cents offer price for Dyna-Mac in offer document
- Estate of Dyna-Mac’s founding shareholder issues follow-up statement after offer document
- Hanwha Group announces ‘final offer’ of 67 cents for Dyna-Mac (update)
- Dyna-Mac’s IFA deems offer to be ‘fair and reasonable’
- Estate of Dyna-Mac’s founding shareholder to accept Hanwha’s offer
- Hanwha Group's offer for Dyna-Mac turns unconditional with acceptances; offer to remain open till Nov 20
- Hanwha to exercise compulsory acquisition rights after stake in Dyna-Mac crosses 90%
