Bingo proposal to end Dial A Dump takeover impasse


ACCC examines divestment offer to get Dial-A-Dump deal over the line

Bingo proposal to end Dial A Dump takeover impasse
A Bingo fleet. Image: Bingo Industries

 

Waste management company Bingo Industries has proposed a divestment of its eastern Sydney waste processing plant to facilitate its $577 million takeover of Dial A Dump Industries (DADI).

The Australian Competition and Consumer Commission (ACCC) is now considering that proposal, conducting a consultation process seeking the views of market participants on whether Bingo’s proposed divestment is likely to address potential competition issues.

The ACCC initially raised competition concerns about Bingo’s proposed acquisition of DADI's 55-vehicle fleet in November 2018, relating to the supply of building and demolition (B&D) waste processing services in Sydney, and the loss of competition between Sydney’s non-putrescible (dry) landfills.


Read more about ACCC's concerns regarding Bingo's planned DADI takeover, here


Bingo has offered to divest its Banksmeadow processing facility in eastern Sydney to an acquirer approved by the ACCC, the watchdog says.

The divestment would either take the form of a long-term lease of the land on which the facility is located, or the outright sale of the land.

As part of its investigation, the ACCC will scope out whether the acquisition of a lease over the land would affect the ability and incentives of the lessee to be an effective competitor in the future.

Bingo’s proposed undertaking does not include any obligations in relation to its landfill sites.

"The ACCC’s decision to consult on this undertaking by Bingo should not be interpreted as an indication that we will accept the undertaking, or that we will ultimately clear the transaction," ACCC acting chair Roger Featherston says.

"Consultation is just one step of the merger review process. The ACCC will continue to consider the proposed acquisition and its potential impact on customers and the market."

Bingo CEO Daniel Tartak tells shareholders the waste management company "remains firmly of the view that the acquisition would not substantially lessen competition in any relevant market".

"We have, however, offered to divest our facility at Banksmeadow to address the ACCC’s specific concern regarding B&D processing in inner Sydney and the Eastern Suburbs if it leads to the ACCC providing final clearance for the DADI acquisition to proceed as announced by Q1CY19," he adds.

"The DADI acquisition is transformational for Bingo and we remain committed to working with the ACCC to reach a suitable outcome.

"We believe that this acquisition is inherently pro-competitive as it enables us to more readily compete against the larger national and international players in the industry.

"The recycling ecology park will provide valuable recycling and waste infrastructure for the ongoing growth of the Greater Sydney Region." 

 

You can also follow our updates by joining our LinkedIn group or liking us on Facebook