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a. the names of the merger parties;
(a) Hanwha Ocean SG Holdings Pte. Ltd. (“Hanwha”); and
(b) Dyna-Mac Holdings Ltd (“Dyna-Mac”).
b. a description of the transaction;
The notification relates to Hanwha’s proposed acquisition of all the issued and paid up Shares in the capital of Dyna-Mac, other than the shares already owned, controlled, or agreed to be acquired by Hanwha (i.e., the “Offeror”). Hanwha is a special purpose vehicle incorporated in Singapore and owned by Hanwha Aerospace Co., Ltd. (“Hanwha Aerospace”) and Hanwha Ocean Co., Ltd. (“Hanwha Ocean”) (collectively, the “Joint Offerors”).
c. a description of the business activities of the merger parties worldwide and in Singapore;
Hanwha
Hanwha is a special purpose vehicle incorporated in Singapore for the purposes of the Proposed Transaction. The ultimate holding company of Hanwha will be Hanwha Aerospace, which is publicly listed on the Korea Exchange, and a subsidiary of the Hanwha Group. Hence, Hanwha Aerospace has control over Hanwha. At present, Hanwha is not engaged in any business activity. Hanwha will not engage in the same businesses as Hanwha Aerospace and thus there is no direct overlap between Hanwha Aerospace and Dyna-Mac. However, post the Proposed Transaction, Hanwha will engage in the same businesses as Hanwha Ocean.
Hanwha Ocean is a public company incorporated in South Korea and listed on the Korean Stock Exchange. It has extensive expertise and experience in the shipbuilding and offshore industry that engages in ship, offshore plant, and specialty ship businesses. Hanwha Ocean is part of the Hanwha Group, a South Korean conglomerate with a diverse portfolio of businesses that span various industries, including energy, ocean, aerospace, finance, and retail & services.
Dyna-Mac
Dyna-Mac is a topside module manufacturing company serving the energy and marine sectors, specialising in the fabrication of topside modules for both offshore and onshore projects.
d. a description of the overlapping goods or services, including brand names;
The Parties do not overlap in the supply of any goods or services in Singapore since they do not have any horizontal relationships between them. However, they do have a limited vertical relationship between them. The relevant upstream market is the worldwide market for fabrication of offshore topside modules, which Dyna-Mac engages in, while the relevant downstream market is the worldwide market for the construction of offshore plants, which Hanwha will engage in.
e. a description of substitute goods or services from demand-side and supply-side considerations;
Downstream market for construction of offshore plants
Substitutes for the offshore plants produced by Hanwha would be offshore plants produced by other competing engineering, procurement and construction companies.
Upstream market for fabrication of offshore topside modules
Substitutes for the offshore topside modules produced by Dyna-Mac would be offshore topside modules produced by other competing block fabrication companies.
f. the applicant’s views on:
i. definition of the relevant market(s);
As stated above, the Parties do not have any overlapping goods or services. However, the Parties have a limited vertical relationship, with the upstream market being the worldwide market for the fabrication of offshore topside modules, which Dyna-Mac engages in, and the downstream market being the worldwide market for the construction of offshore plants, which Hanwha will engage in.
ii. the way in which competition functions in this market;
Competition takes place in highly competitive worldwide upstream and downstream markets in the offshore plant sector. Customers in both the upstream and downstream markets source for offshore plants and offshore topside modules respectively on a global basis from a wide range of suppliers that operate worldwide.
iii. barriers to entry and countervailing buyer power; and
Hanwha submits that in both the upstream and downstream markets, countervailing buyer power is substantial, and the barriers to entry to the markets are not insurmountable in view of the absence of planning restraints, technology, R&D requirements, regulatory barriers, import restrictions and IP rights, and the availability of raw materials.
iv. the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant).
Non-coordinated effects
Not applicable, as the Parties do not have any overlapping goods or services.
Coordinated effects
The Parties submit that the Proposed Transaction will not give rise to coordinated effects in both the upstream and downstream markets in view of the following factors, including the presence of a wide range of global suppliers, limited projects available per year, the substantial bargaining power of buyers, and low barriers to entry and expansion.
Vertical effects
The Parties submit that they have a limited vertical relationship. The Proposed Transaction will not give rise to competition concerns as the Parties will have no ability or incentive to foreclose competitors with respect to such vertical links.
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