Cleanaway Waste Management Ltd has secured a key regulatory green light in its bid to acquire Contract Resources Group Pty Ltd, with the Australian Competition and Consumer Commission (ACCC) announcing it will not oppose the deal.
In a statement released on Friday, the ACCC said its review found the proposed acquisition was unlikely to substantially lessen competition in either industrial services or waste management markets. The decision paves the way for Cleanaway to finalise the transaction by the end of the month.
ACCC sees minimal competitive overlap
While both companies provide industrial services to sectors including oil and gas, the ACCC found that Contract Resources mainly specialises in technical services such as catalyst handling — a niche in which Cleanaway does not operate.
For other industrial services that both Cleanaway and Contract Resources supply, the commission found the merged entity would continue to face competition from alternative suppliers.
“Cleanaway and Contract Resources compete mainly for customers in the oil and gas sector,” ACCC commissioner Philip Williams said. “These customers are generally large, well-resourced organisations that could sponsor new entry or sponsor the expansion of existing rival suppliers. We have seen oil and gas companies sponsor new entry before.”
The regulator also examined whether Cleanaway could leverage Contract Resources’ specialist capabilities to force customers into bundled waste management contracts. However, it concluded such a strategy was unlikely to succeed, given customers have other options.
“Overall, we did not find that the proposed acquisition is likely to substantially lessen competition in the supply of industrial services or waste management services,” Williams said.
Cleanaway highlights strategic fit
Following the ACCC decision, Cleanaway confirmed the acquisition is on track to complete on July 31.
In a statement to the ASX, the company’s CEO and managing director, Mark Schubert, welcomed the outcome, describing Contract Resources as a “highly strategic acquisition” that strengthens the company’s footprint in industrial services.
“I’m excited about the growth Contract Resources will bring to Cleanaway through the acceleration of our strategy to capture the decommissioning, decontamination and remediation (DD&R) opportunity,” he said.
“With its market-leading reputation, technical capabilities, and Tier 1 oil and gas customer base, Contract Resources enhances our value proposition and positions us to secure a greater share of decommissioning, decontamination, and remediation (DD&R) projects and the complex, hazardous waste streams they generate.”
Background to the deal
Cleanaway is one of Australia’s largest waste management and recycling firms, with operations spanning collection, processing, and industrial services.
Contract Resources, currently owned by private equity firms SCF Partners Inc and Viburnum Funds Pty Ltd, provides complex industrial maintenance services to the energy and resources sector. Its offerings include catalyst handling, mechanical maintenance of industrial equipment, tank cleaning and chemical decontamination.
Both companies operate in overlapping areas of ‘baseline’ industrial services, such as high-pressure water cleaning, vacuum loading, and emergency response — but Contract Resources’ more specialised services appear to have mitigated competition concerns.
The ACCC’s full review can be accessed on its public merger register.