The ACCC will not oppose Cleanaway Waste Management Limited's (ASX:CWY) proposed acquisition of the waste and recycling business of Citywide Service Solutions Pty Ltd (Citywide Waste).
Cleanaway is one of the largest waste management companies in Australia. It is vertically integrated through the waste supply chain, from disposals to collections, with operations in all states and territories in Australia.
In Melbourne, Cleanaway provides collection and disposal services for commercial and industrial customers, and municipal councils. Cleanaway operates one of the largest landfills in Melbourne, the Melbourne Regional Landfill in Ravenhall, and a network of transfer stations.
Citywide Waste, currently owned by the City of Melbourne Council, offers collections services for municipal councils and commercial and industrial customers. Citywide Waste also operates the Dynon Road transfer station which accepts large volumes of putrescible waste and is close to the Melbourne CBD, making it a key disposal facility.
The ACCC's investigation focused on the acquisition's impact on competition in the supply of putrescible waste disposal services in Melbourne for commercial and industrial waste.
"Our investigation looked at the central and west regions of Melbourne in particular because we were concerned about the loss of competition between Melbourne Regional Landfill and the nearby Dynon Road transfer station located in these regions," ACCC Commissioner Dr Philip Williams said.
"We reached two key conclusions from our investigation. First, those customers with larger waste collection trucks are able to optimise their waste collection routes to divert volumes to landfills and transfer stations other than the Melbourne Regional Landfill and Dynon Road transfer station."
"This means that should Cleanaway own both facilities, larger collections customers would still be able to take waste volumes to other competitors if needed," Dr Williams said. "Second, we found that while some customers preferred the Dynon Road transfer station due to its closeness to the Melbourne CBD and ease of access for smaller waste collection trucks, these customers don't see Melbourne Regional Landfill as a viable alternative now."
"We therefore found that the acquisition is unlikely to have an impact on those customers," Dr Williams said.
Ultimately, the ACCC found the proposed acquisition would be unlikely to substantially lessen competition in the supply of putrescible waste collection and disposal services for both commercial and industrial waste, and municipal waste in Melbourne.
The ACCC expects rival landfills and transfer stations in Melbourne to continue to compete for waste volumes with Cleanaway after the acquisition.
More information including the Statement of Issues can be found on the ACCC's website at Cleanaway Waste Management Limited - Citywide Waste.
Note
Putrescible waste is solid waste that contains organic material capable of being decomposed by microorganisms.
Transfer stations act as consolidation points where waste is dropped off by collection companies and bundled for bulk transport by trucks to final disposal sites. These sites can be landfills where waste may ultimately be buried.
Background
Cleanaway is a public company listed on the ASX. It is one of the largest waste management companies in Australia. Cleanaway provides recycling, waste management and industrial services in Australia.
Cleanaway is vertically integrated across waste collections, processing and disposal services. In Melbourne, Cleanaway owns and/or operates a network of putrescible transfer stations at Brooklyn, Lysterfield and the South East Melbourne Transfer Station, in addition to the Melbourne Regional Landfill.
Citywide Waste is 100 per cent owned by Melbourne City Council and provides waste management services to municipal councils and commercial and industrial customers in Melbourne. It has operated the Dynon Road transfer station since 1995.
