The Australian Competition and Consumer Commission (ACCC) has flagged potential issues with Cleanaway Waste Management’s (ASX:CWY) planned acquisition of the waste and recycling division of Citywide Service Solutions.
In June this year, Cleanaway had agreed to acquire the division for $110m. As part of the transaction, Cleanaway committed to redevelop the Dynon Road waste transfer station into a larger, efficient, modern post collections facility. This was expected to cost approximately $35m, with an additional $10m contribution from the City of Melbourne over the first four years of Cleanaway’s ownership.
ACCC Commissioner Dr Philip Williams expressed concern that the acquisition could lead to reduced competition, particularly in central and western Melbourne, by consolidating Cleanaway’s control over critical waste disposal facilities. “Our preliminary view is that the proposed acquisition would remove the close competitive tension between Cleanaway’s and Citywide Waste’s facilities,” Dr Williams said. “We are concerned that the expansion of Cleanaway’s waste disposal network may enable Cleanaway to charge downstream collection providers higher prices and reduce service quality. Rival waste collectors, particularly commercial and industrial collectors, require access to waste disposal facilities at competitive rates, and competitive service levels, to compete effectively for customers.”
The Dynon Road transfer station, located just 5km from Melbourne’s CBD, is the second-largest waste transfer station in Victoria, handling over 200,000 tonnes of waste annually.
The ACCC has invited public feedback, with submissions open until 28 November 2024.
Cleanaway, headquartered in Melbourne, operates one of the most extensive waste management networks in Australia, with over 7,600 staff and 5,900 vehicles. Its services span collections, recycling, and disposal, with facilities such as landfills, transfer stations, and recycling plants nationwide. Citywide Waste, on the other hand, has served Melbourne’s municipal and industrial clients since 1995, managing key assets like the Dynon Road transfer station.
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