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ACM clears acquisition of laundry service company

30-08-2019

Active Capital Company, owner of laundry service company CleanLease, is allowed to acquire rival provider LipsPlus (stylized as LIPS+). The Netherlands Authority for Consumers and Markets (ACM) today cleared the planned acquisition. ACM did not attach any conditions to the clearance of the acquisition.

Follow-up investigation into hospital-textile laundries

Active Capital Company is an investment firm. One of its portfolio companies is laundry service company CleanLease with laundries in the Netherlands and in Belgium. LIPS+ is a large laundry service provider with laundries across the Netherlands. Both companies clean textile, such as bed sheets, clothes, and towels for businesses in, among other sectors, the hospitality industry, health care, and the hospital industry.

ACM comes to the conclusion that, after the acquisition, hospitals will continue to have sufficient competitors to choose from for their hospital-textile laundry needs. After its first-phase investigation into the acquisition, ACM established that further investigation was needed into the potential hospital-textile laundry sector. This second-phase investigation shows that the combined market share of these two companies on the potential hospital-textile laundry market is high, though it has decreased over the past few years. In that context, they have been put under considerable competitive pressure, particularly these last few years, from other medium-sized and large laundries.

As part of its follow-up investigation, ACM asked questions to hospitals and competitors. In that investigation, ACM looked into, among other aspects, the competitive dynamics between laundries when hospital contracts are put out to tender.

What does ACM do with mergers and acquisitions?

ACM assesses in advance whether businesses that wish to join forces do not become too powerful. This has been laid down in the Dutch Competition Act. The objective of that act is to protect people and businesses against higher prices, lower quality, and/or reduced innovation.