The ACCC has announced that it will not stand in the way of the proposed Cleanaway Waste Management Ltd (ASX: CWY) acquisition of Tox Free Solutions Limited (ASX: TOX).
Whilst the ACCC conceded that the acquisition would result in the "lessening of competition", it said the threat of customers switching to global competitors such as Veolia, Suez and Remondis would constrain Cleanaway from significantly increasing prices or decreasing service levels. Cleanaway shares were up 2% following the announcement.
Foolish takeaway
I think the announcement is great news for Cleanaway shareholders. Buying out a competitor gives them more market share and economies of scale.
I also think perhaps the ACCC might be underestimating the "stickiness" of the product. It's not every day that companies will decide to change their waste management company.
If Cleanaway is not for you, you must read about these ASX companies that are about to raise their dividends!
