Competition watchdog clears Nissan's 34% stake buy of Mitsubishi

Competition watchdog clears Nissan's 34% stake buy of Mitsubishi

Nissan acquired a 34 per cent controlling stake in Mitsubishi in a 237 billion yen (S$2.97 billion) deal last October.

SINGAPORE: The Competition Commission of Singapore (CCS) has cleared Nissan Motor's acquisition of a 34 per cent shareholding in rival Mitsubishi Motors, it announced on Monday (Feb 6).

Nissan acquired a 34 per cent controlling stake in Mitsubishi in a 237 billion yen (S$2.97 billion) deal last October, pledging to help its smaller rival recover from a mileage cheating scandal that came to light last year.

CCS issued its clearance decision for the transaction to the two companies on Jan 23 this year.

The competition watchdog said that it sought feedback from end-customers, distributors and other vehicle manufacturers to assess the impact of the acquisition in Singapore.

It concluded that the transaction had not resulted in a substantial lessening of competition in the relevant markets - mini cars, small cars, medium cars, sports utility vehicles and pick-up trucks.

When combined, the two companies' combined market shares for passenger vehicles do not exceed 40 per cent of any of the relevant markets, the threshold CCS uses to gauge whether the merger may raise competition concerns.

They do exceed the threshold for light commercial vehicles such as vans, mini-vans and pick-ups, dominating 60 to 70 per cent of the market after the acquisition. However, CCS noted that the market share figures may not be a reliable indicator of competition in the market for pick-up trucks as "there is considerable degree of volatility in the market shares of both the parties and their competitors and there is sufficient competition from other major suppliers of pick-up trucks in Singapore".

The watchdog added that barriers to expansion and entry are "not overly high" in the markets for passenger and light commercial vehicles.

"New brands of passenger vehicles have entered Singapore in recent years, and there would be little cost for an existing manufacturer that already supplies passenger vehicles in Singapore to supply light commercial vehicles as the manufacturer can tap on its existing passenger vehicle distribution network," it said in the statement.

Under the Competition Act, CCS can issue directions to remedy, mitigate or eliminate adverse effects if it assesses that a merger has resulted in "substantial lessening" of competition in Singapore.

Source: CNA/mz

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