Commerce Commission declines Tennex Capital application to buy San-i-pak

Tuesday 1st March 2016

The Commerce Commission has turned down Tennex Capital's application to acquire San-i-pak, saying the merger would give it a monopoly on the treatment and disposal of medical and quarantine waste in the South Island.

Tennex provides medical and quarantine waste collection, treatment and disposal services through its International Waste subsidiary, with facilities in Auckland, Wellington, Christchurch and Dunedin, while San-i-pak mainly collects such waste in Canterbury for treatment at its single plant in Christchurch.

Tennex had argued that San-i-pak was likely to exit the market if a merger wasn't approved. But commission chairman Mark Berry said the regulator was "unable to exclude the real chance that San-i-pak would continue to operate, whether under its current owners or under the ownership of a third-party after a sale.”

“We also aren’t convinced that other suppliers would enter the market and replace the competition lost between IWL and San-i-pak,” he said. "In our view, we could not exclude the real chance that as a result of this merger the prices paid for the treatment and disposal of medical and quarantine waste services would increase.”

San-i-pak is owned by Christchurch interests, while Tennex is owned by a small group of shareholders in Wellington and Dunedin, according to the Companies Office.

BusinessDesk.co.nz

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