Commission authorises Tennex’s acquisition of San-i-pak

The Commerce Commission has today granted authorisation to Tennex to acquire the assets of competing Canterbury-based waste firm San-i-Pak.

Tennex, through its subsidiary International Waste Limited (IWL), and San-i-pak are the sole providers of medical and quarantine waste treatment and disposal services in the South Island. The acquisition would result in IWL being the only provider of these services subject to another waste management firm entering the market in the future.

The Commission’s preliminary view, published last month in a Draft Determination, was that it should grant authorisation. After taking into account submissions received on the Draft Determination, its view remains unchanged.

Chairman Dr Mark Berry said that while the acquisition would likely result in IWL raising its prices for its quarantine and medical waste disposal services in Canterbury, the Commission’s view was that it was likely to produce such a benefit to the New Zealand public that it should be authorised.

“We estimate the consolidation of the two firms could produce a net benefit of up to $1.3 million in net present value terms over 10 years, which in our view would outweigh the likely negative consequences of this acquisition. Tennex will also face some constraints when it negotiates national contracts and other firms are likely to submit bids when large customer contracts are up for tender in Christchurch,” Dr Berry said.

The Commission’s final determination will be available in the new year on the Commission’s
case register.

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