Canadian regulator challenges GFL’s acquisition of Terrapure on anti-competition grounds, GFL responds

The Competition Bureau, an independent Canadian law enforcement agency that ensures that markets operate in a competitive manner, announced Dec. 1 that it was challenging Ontario-based GFL Environmental’s recent acquisition of Terrapure Environmental “to protect competition for customers of industrial waste services (IWS) and oil recycling services (ORS) in western Canada.”

GFL announced Aug. 17 that it had closed the acquisition of the solid waste and environmental solutions business of Ontario-based Terrapure Environmental Ltd. and its subsidiaries. Earlier in the year, GFL reported the price of the deal at $743.8 million.

In a news release, the Competition Bureau states, “Prior to the transaction, Terrapure was GFL's closest competitor in many IWS and ORS markets in western Canada. A bureau review found that the elimination of this rivalry is likely to result in increased prices and reduced service quality for customers.

“The bureau concluded that the transaction has likely substantially lessened competition in the collection and processing of industrial waste on Vancouver Island, in the British Columbia Interior and in Central Alberta.

“The bureau also determined that the transaction is likely to cause a substantial lessening of competition in the provision of ORS in eight regions across British Columbia, Alberta and Saskatchewan."

The Competition Bureau concludes, “As such, on Nov. 30, 2021, the bureau filed an application with the Competition Tribunal for a court order requiring GFL to sell any assets necessary to remedy the likely substantial lessening of competition resulting from the acquisition.”

In response to the Competition Bureau’s challenge, GFL issued a statement acknowledging that it was aware of the action.

GFL also notes in its statement that the bureau’s challenge was specific to seven locations in Canada that generate annual revenue of approximately $30 million and that “the acquisition closed on Aug. 17, 2021, following the expiration of the statutory waiting period under the Competition Act (Canada).”

GFL says it intends to work in cooperation with the bureau to resolve the matter.