BINGO expects to achieve run-rate cost synergies of around $15 million per annum over a two-year period, through internalisation of waste volumes, operational efficiencies, and rationalisation of overheads.
ACCC clearance satisfies a condition precedent relating to the acquisition of DADI, and transaction settlement is expected to occur in March 2019.
ACCC Chair Rod Sims said,
“The Eastern Creek landfill site that Bingo will acquire is a strategically significant asset given that some of Sydney’s other dry waste landfills are due to close in the next few years and approval of new landfills is likely to be difficult,”
“The current practice of taking waste to Queensland will also become more costly after the introduction of the Queensland landfill levy.”
Post-acquisition Bingo is expected to hold a significant share of Sydney dry landfill in terms of both annual throughput and remaining airspace.
A key issue was whether Bingo would be able to stop competing B&D waste processors from having access to dry landfill at competitive prices due to its increased vertical integration.
Due to the introduction of the Queensland landfill levy, the ACCC considers it likely that Sydney dry landfill prices will rise this year regardless of the proposed acquisition.
BIN Price at posting:
$1.63 Sentiment: Buy Disclosure: Held
