The Australian Competition and Consumer Commission will not intervene in the proposed acquisition of Linencare Australia by Ensign Services (Aust) Pty Ltd, a wholly owned subsidiary of Spotless Group Limited, ACCC Chairman, Professor Allan Fels, announced today.
Although the proposed acquisition will create a merged entity with a substantial market share, the ACCC formed the view that the acquisition was unlikely to substantially lessen competition.
The major area of competitive overlap between Spotless and Linencare is in the provision of linen and laundering services to the healthcare sector, particularly in regard to the major public hospitals. The ACCC believes that the combined government healthcare sector has significant negotiating strength with the capacity to exercise countervailing power against the merged entity.
The ACCC also notes the presence of a number of other competitors aside from the merged entity with the capacity to services other healthcare providers and the hospitality sector.
Spotless currently operates a commercial laundry business in Western Australia operating under two trading names, Spotless Linen and Ensign. Linencare is a major supplier of the linen and laundry services to the Western Australian public healthcare sector and the hospitality industry.
As part of its investigation into the proposed acquisition, the ACCC conducted extensive market inquiries with submissions sought from both competitors and customers.