Completed acquisition by Augean plc of Atlantic Waste Holdings Ltd and Zero Waste Holdings Ltd

Affected market: Waste disposal

No. ME/1635/05

Please note that the full text of the decision can be downloaded by using the link on the right . What follows are extracts regarding the parties, the transaction, jurisdiction, assessment, undertakings in lieu and decision.

The OFT's decision on reference under section 22 given on 9 May 2005. Full text of decision published 11 May 2005.

PARTIES

Augean plc (Augean) is a cash shell company formed in 2004 to acquire businesses in the UK water and UK waste markets. Pre-acquisition it did not carry out any activities in waste management.

Atlantic Waste Holdings Limited (Atlantic) and Zero Waste Holding Limited (Zero) are both active in waste disposal, in particular the ownership and management of landfill sites with a particular emphasis on hazardous waste. Zero's UK turnover for the year ending 30 September 2004 was £5,623,000 and Atlantic's UK turnover for the year ending 31 December 2003 was £10,452,000.

TRANSACTION

The acquisitions by Augean of both Atlantic and Zero were completed simultaneously on 15 December 2004. The extended statutory deadline is 19 May 2005. The administrative timetable expires on 8 June 2005.

JURISDICTION

As a result of this transaction Augean, Atlantic and Zero have ceased to be distinct. The parties overlap in the operation of landfill sites for the disposal of hazardous and non-hazardous waste. Given the parties' share of approximately 33 per cent of those sites capable of taking the full range of hazardous waste in the UK, the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met. The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

ASSESSMENT

The parties overlap in the operation of both hazardous and non-hazardous landfill sites.

In the non-hazardous waste disposal sector, the parties operate two sites out of a total of over five hundred sites in the UK. The two sites are located approximately 180 miles apart and are not considered to have competed pre-merger to any appreciable extent. The OFT does not believe that the transaction affects competition in the disposal of non-hazardous waste via landfill.

Post-merger the merged entity runs two hazardous waste landfill sites, located 180 miles apart. Most customers did not consider them to be viable alternatives. To the extent that some customers were prepared to transport waste the additional distance to another site, this would not generally be viable unless a large gate price differential existed to cover the additional transport costs. While it has been submitted to the OFT that most customers only supply hazardous waste on a regional basis, in any event, on a national basis three alternative sites accepting the full range of hazardous waste will remain post-merger, together with at least ten other sites accepting a more restricted range of hazardous waste.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.

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