Shares in waste removal group, Bingo Industries fell to their lowest levels for more than a year yesterday after the competition regulator, the Australian Competition and Consumer Commission raised serious doubts about the company’s proposed $578 million purchase of rival Sydney rubbish dumper, Dial-a-Dump.
The shares hit an intra-day low of $1.965 before ending at $2.15, off 5.3% and the lowest the shares have been since early 2017.
Bingo announced on August 21 it was buying Dial-a-Dump, but the ACCC revealed on Thursday it had preliminary concerns about the purchase and its effect on competition in waste processing, landfill and collections, particularly in eastern and inner-city Sydney.
ACCC chairman Rod Sims said in a statement the regulator was investigating vertical integration issues in the industry and is now seeking submissions by December 13 from interested parties on a statement of issues it released on Thursday.
It expects to make a final decision on the proposed buyout on February 21, 2019.
The deal would make Bingo the largest building and demolition waste collection company in Sydney and in the eyes of the ACCC could diminish competition for processing, landfill, and collections.
“The acquisition would remove future competition between Bingo’s and Dial-a-Dump’s dry landfills, which may lead to higher gate fees than would be likely without the acquisition,” he said.
“Competition between Sydney landfills is likely to become more important after the introduction of the Queensland landfill levy, which will make transporting waste to Queensland more expensive.”
The industry relies heavily on the three levels of the supply chain – collection, processing and landfill – and affordable access to processing facilities are needed to compete for customers, ACCC says.
