Was it clean-up day at the Australian Competition and Consumer Commission (ACCC) yesterday or an end of year sale, with three corporate deals given the green light after hanging round for a while?
First up the ACCC said on Thursday it would not block the planned takeover of Sydney Airport by a group of industry superfunds in a $232.6 billion deal.
Including debt, the value of the transaction is more than $32 billion to the group of industry superannuation funds operating through the fund-owned IFM Investors.
ACCC chair Rod Sims said there was “very little, if any,” competition between Australian airports and the proposed transaction would be unlikely to have an impact on consumers.
“This is no surprise, as we’ve been saying for a long time that Australian airports such as Sydney Airport are natural monopolies, with significant market power and no price regulation,” Mr Sims said in a statement on Thursday.
IFM Investors and a consortium of other funds will take the ASX-listed airport private for $8.75 a share.
The pandemic and closing international borders for most of the past two years exposed the listed airport to acquisition, which is what happened in the end.
The company’s shares rose 2.8% to $8.57.
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Still in clean-up mode and the ACCC also announced that it will not oppose the proposed acquisition by Cleanaway of two landfills and five transfer stations in Sydney from French conglomerate, Suez.
Cleanaway and Suez provide waste management services nationally. In Sydney, they own non-putrescible, or dry, landfills and transfer stations.
Suez also owns a putrescible landfill in Sydney, but Cleanaway does not. (‘Putrescible’ waste refers to solid waste which contains organic matter such as food, general household and commercial waste).
“Our main focus was on the impact the acquisition might have on competition for the collection and processing of putrescible waste in Sydney and nationally,” ACCC Commissioner Stephen Ridgeway said in a statement on Thursday.
“We concluded that while the transaction would likely make Cleanaway a stronger competitor, it is unlikely to lead to a substantial lessening of competition. This transaction is unlikely to significantly alter the current competitive dynamics in Sydney, or nationally, for putrescible waste.”
In its analysis of competition in the market for non-putrescible waste disposal, the ACCC concluded there will remain a number of alternative inert landfills in the Sydney region that will continue to compete against Cleanaway following the acquisition.
The ACCC is separately investigating Veolia’s proposed acquisition of Suez’s remaining business.
Veolia has offered an undertaking to divest Suez’s Seven Hills transfer station in Sydney, as well as other assets in Western Australia and South Australia, and a package of national commercial and industrial customer contracts and the proposed acquisition by Cleanaway needs to be considered in that context, the statement from the Commission explained.
Cleanaway shares dipped 0.3% to $2.93.
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And finally, the Commission has waved through Seven West Media’s own clean-up of its NSW regional affiliate Prime Media Group.
The ACCC said it had conducted a review of a similar proposal in 2019 and at the time had announced that it would not oppose the merger of Seven West and Prime.
That transaction did not proceed after it was not approved by the requisite number of Prime’s shareholders.
“Given the importance of media markets, we decided to conduct a public review for this proposed acquisition. Despite not opposing the 2019 proposed acquisition, we thought it was important to still closely scrutinise this transaction,” ACCC Chair Rod Sims said in Thursday’s statement.
“We focused our assessment on whether there had been any material changes in the relevant markets since the ACCC’s 2019 review.”
“We received minimal engagement from market participants including rival media companies, and feedback received indicated there had been no material changes in the relevant markets,” said Mr Sims.
“Consistent with our findings in 2019, we concluded that the proposed acquisition was unlikely to substantially lessen competition or choice for advertisers and consumers. This is because Seven West Media and Prime are not particularly close competitors in the supply of advertising opportunities or the supply of media content, and other competitors will constrain the merged entity,” Mr Sims said.
Most of Prime’s broadcast content is currently supplied by Seven West Media, although Prime produces its own regional news in some regions, including the GWN7 News broadcast in regional WA on weeknights.
Seven West media shares fell 3.9% to 61.5 cents.
