The proposed acquisition of Spotless Laundries majority-owned by Downer EDI (ASX:DOW) raises competition concerns

Company News

by Rachael Jones

The ACCC has identified potential competition concerns with South Pacific Laundry (SPL)’s proposed acquisition of Spotless Laundries, which is part of Spotless Group Holdings which is majority-owned by Downer EDI (ASX:DOW).

Spotless Laundries and SPL both offer commercial laundry services in multiple cities and regions across Australia.

“This transaction would combine the two largest commercial laundry suppliers in Sydney and Adelaide, and two of the biggest suppliers in Melbourne and Perth, increasing market concentration where there are already a limited number of comparable suppliers,” ACCC Commissioner Stephen Ridgeway said.

In Sydney, Adelaide, Melbourne and Perth, a combined SPL and Spotless Laundries would be the largest supplier with substantial market shares and a significant gap to its next largest rivals.

Shares in Downer EDI (ASX:DOW) are trading 2.3 per cent lower at $4.27.