Approval of combination, the application was filed jointly by Ting Chieu Trading Corporation, Kang Sheng Investment Corporation Ltd., Kang Fa Investment Corporation Ltd., and Kang Ching Corporation Ltd. for combination with Wei Chuan Food Industrial Co., Ltd.
Chinese Taipei
Case:
Approval of combination, the application was filed jointly by Ting Chieu Trading Corporation, Kang Sheng Investment Corporation Ltd., Kang Fa Investment Corporation Ltd., and Kang Ching Corporation Ltd. for combination with Wei Chuan Food Industrial Co., Ltd.
Key words:
approval of combination
Reference:
Fair Trade Commission Decision of 29 July 1998 (351st Commission Meeting); Decision (87) Kung Chieh Tzu No. 8800511
Industry:
Dairy Goods Production Industry (1120)
Relevant Laws:
Summary:
Ting Chieu Trading Corporation, Kang Sheng Investment Corporation Ltd., Kang Fa Investment Corporation Ltd., and Kang Ching Corporation Ltd. (the applicants) are affiliates of a business group (known as Ting Hsin) and have control or subsidiary relationship with each other. As of 30 May 1998, they had obtained the majority of seats on the Board of Directors of Wei Chuan Food Industrial Co., Ltd. (Wei Chuan), and thus are in direct or indirect control of the appointment or dismissal of the personnel operating Wei Chuan's business. The act was a combination in accordance with Article 6(1)(v) of the Fair Trade Law (FTL). In addition, because Wei Chuan's annual sales last year reached the standards published by the Fair Trade Commission (this Commission), the applicants must apply for this Commission' s approval of the combination as provided under Article 11 of the FTL.
Reasons for granting the approval are as follows: (1) Wei Chuan's primary products, including dairy goods and soybean sauce, may be distributed to the PRC and overseas markets through Ting Hsin's market access. Wei Chuan may thus promote sales of its products in the PRC and overseas markets. In addition, since their products are different, Wei Chuan and Ting Hsin may complement each other in terms of products and market access, thereby promoting Wei Chuan's operational efficiency. (2) The applicants are specialized in management and cost control so they may integrate Wei Chuan's R&D ability and human resources with their management ability to make the best use of the resources. (3) The applicants' major business is investment and import and export trading. They purchase materials from foreign markets and transship them to the PRC for processing. Their combination focuses on developing the market in the PRC and overseas and will not change Wei Chuan's business line. Therefore, it should not bring any adverse effect to competition in the domestic market. (4) Though the Ting Hsin Group and Wei Chuan both belong to the food production industry, their products are distributed to different markets. The instant noodle, mineral water, beverage and biscuit products of Ting Hsin are different from Wei Chuan's major product line in terms of production and distribution, in that they mainly take place in the PRC. In accordance with current laws and regulations of Chinese Taipei, instant noodle, small-package mineral water and biscuit products made in the PRC cannot enter the Chinese Taipei market. Therefore, neither Wei Chuan's current products nor the competition in the domestic food market will be adversely affected.
In conclusion, this Commission found that the combination may help reform the participating enterprises and increase their competitiveness without resulting in the adverse effect of substantial centralization of the domestic market. Therefore, the combination was approved in accordance with Article 12 of the FTL.
Summarized by Hung Hsiu-hsing
Supervised by Shih Chin-ts'un
Appendix:
Ting Chieu Trading Corporation' s Uniform Invoice No.: 23492388
Kang Sheng Investment Corporation Ltd.' s Uniform Invoice No.: 16481341
Kang Fa Investment Corporation Ltd.' s Uniform Invoice No.: 16327116
Kang Ching Corporation Ltd.' s Uniform Invoice No.: 16481567