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Merger of Book Distributors: CCS Grants Conditional Approval after Times Publishing/Penguin Group Undertakes not to Discriminate Against Book Retailers

2017, Singapore, Mergers & Acquisitions

The Competition Commission of Singapore (“CCS”) has granted conditional approval of Times Publishing Limited’s (“TPL”) proposed acquisition of Penguin Random House Pte. Ltd. and Penguin Books Malaysia Sdn. Bhd. (collectively “Penguin Group Companies”) from Penguin Random House Limited (‘‘PRH’’) (“Proposed Transaction”) after accepting commitments from TPL. The Proposed Transaction entails Penguin Group Companies entering into an exclusive distribution agreement (“Distribution Agreement”) with the Publishers.

CCS had earlier raised competition concerns after its initial review of the Proposed Transaction. Prior to the Proposed Transaction, the PRH or Penguin Group Companies are not affiliated with any book retailer in Singapore, and books published by PRH are currently sold by different distributors to retailers. After the Proposed Transaction, pursuant to the Distribution Agreement, the Publishers’ titles will be distributed exclusively in Singapore, Malaysia and Brunei by the merged entity, which will be affiliated with a downstream retailer, namely Times The Bookstores. This may lead to the merged entity having greater ability and incentive to discriminate or restrict supply of the Publishers’ titles to other retailers. 

To address the competition concerns, TPL has committed to supply third-party retailers the full range of books by the Publishers on a fair, reasonable and non-discriminatory (“FRAND”) basis during the period of exclusive distribution. TPL will also apply the same Distributor Recommended Retail Price to all retailers, and will apply discounts to retailers in a FRAND manner, based on a set of objective discount criteria. An Independent Auditor will be appointed by TPL to monitor compliance with the commitments.

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