Feedback sought over competition concerns in SEEK-JobStreet deal

  • Phase 1 review unable to conclude acquisition would not raise competition concerns
  • Following market consultation, to decide on proposed commitments
Feedback sought over competition concerns in SEEK-JobStreet deal

THE Competition Commission of Singapore (CCS) is seeking views from market participants on whether the SEEK Ltd-JobStreet deal would raise competition concerns.
 
The country’s Competition Act prohibits mergers that result, or may be expected to result, in substantial lessening of competition within any market in Singapore.
 
The decision to commence market consultation came after CCS completed its Phase 1 review of the deal in April. However, the review was unable to conclude that the proposed acquisition would not raise competition concerns, based on information furnished during this phase.

The proposed acquisition has now proceeded to a Phase 2 review.
 
“CCS today commenced market consultation on the proposed commitments offered by SEEK in respect of the proposed acquisition in order to address the potential competition concerns that may arise as a result of the proposed acquisition,” CCS said in a statement.
 
According to CCS, the terms in the proposed commitments will see SEEK prevented from entering into exclusive agreements with employers and recruiter customers; as well as committed to maintaining current pricing of its services capped at present day rate cards or current day negotiated prices, subject to Consumer Price Index variations.
 
“By deterring exclusivity, the proposed commitments aim to retain the current practice of multi-homing (i.e. utilising more than one online recruitment advertising service platform) by employers and recruiters, as well as jobseekers. It further aims to keep barriers to entry and expansion low, and preserve competition in the market for online recruitment advertising services.
 
“By capping pricing at current levels, the proposed commitments seek to address concerns identified by market participants during the Phase 1 and 2 reviews that the closeness of competition between JobsDB Singapore and JobStreet Singapore is likely to cause prices to rise post-merger,” said CCS in the statement.
 
These commitments will be for a period of three years.
 
To recap, in February, SEEK announced its plan to take over the remaining stakes it does not own in certain recruitment business assets of JobStreet Corp Bhd, including JobStreet.com Pte Ltd.
 
The deal, which is valued at over RM1.73 billion (US$523.5 million), will also result in the 'merging' of Jobstreet and JobsDB businesses. SEEK plans to combine the JobStreet business with jobsDB to “unlock large growth opportunities.”
 
“Following market consultation, CCS will decide whether to accept or reject the proposed commitments,” said the commission.
 
The approval by CCS is crucial, as it is one of the approvals required in order for the deal to go through.
 
JobStreet, founded in 1997 and listed on Bursa Malaysia in 2004, is one of the survivors of the first dotcom-boom-and-bust cycle in Asia. On April 26 this year, the Bursa Malaysia-listed company passed RM1 billion in market capitalization when its share price closed the week at RM3.20.
 
Related Stories:
 
JobStreet hits milestone, crosses RM1 bil market cap
 
Australia’s Seek to acquire JobStreet outright   

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