REG - Competition and Mkts - Merger update: Veolia / Suez

Veolia Environnement SAAnnouncement

07/12/2021 08:20

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RNS Number : 8032U  Competition and Markets Authority  07 December 2021

 

FOR IMMEDIATE RELEASE - TUESDAY 7 DECEMBER

CMA finds Veolia / Suez merger raises competition concerns

The CMA has found that the merger of Veolia and Suez could lead to a loss of
competition in the supply of several waste and water management services in
the UK.

Veolia and Suez are two of the largest suppliers of waste management services
to councils and businesses in the UK and global leaders in the sector. The
transaction is being reviewed by a number of competition authorities globally.
Both companies are active across the waste management supply chain from the
collection of waste to the operation of facilities for composting and
incineration and landfill sites. The companies also supply water and
wastewater management services to industrial customers.

The Competition and Markets Authority (CMA) has received a number of
complaints from customers and other market participants during its
investigation and it has identified a number of competition concerns that
could lead to councils paying higher prices, with a knock-on effect on
taxpayers.

In particular, the CMA is concerned that Veolia and Suez are two of only a
small number of suppliers active within the UK that are able to service the
largest and most complex waste management contracts with councils. As a
result, the merger could lead to higher prices and lower quality services
across a range of waste management activities in the UK.

Andrea Coscelli, Chief Executive of the CMA, said:

"Councils spend hundreds of millions of pounds on waste management services.
Any loss of competition in this market could lead to higher prices for local
authorities, leaving taxpayers to foot the bill, and reduced innovation to
achieve Net Zero targets. Everyone in the UK uses waste and recycling services
in some way, it is therefore vital that this deal is subject to more detailed
scrutiny if our concerns aren't addressed."

The CMA also identified competition concerns in several water management
markets, where insufficient competition after the merger could mean that
industrial customers would also have to pay higher prices.

Veolia and Suez now have 5 working days to submit proposals to address the
CMA's concerns. If suitable proposals are not submitted, the deal will be
referred for an in-depth Phase 2 investigation.

For more information, visit the Veolia / Suez merger inquiry page
(https://www.gov.uk/cma-cases/veolia-slash-suez-merger-inquiry) .

Notes to editors:

 

1.   For media enquiries, contact the CMA press office on 020 3738 6460
or press@cma.gov.uk (mailto:press@cma.gov.uk) .

2.   The CMA found that the merger gives rise to a realistic prospect of a
substantial lessening of competition in the following areas on a UK-wide
basis:

·      the supply of complex waste management contracts procured by
local authorities;

·      the supply of non-hazardous commercial and industrial waste
collection services;

·      the supply of non-hazardous municipal waste collection services;

·      the supply of services for the operation and maintenance of local
authority-owned energy recovery facilities;

·      the operation and maintenance of water and wastewater treatment
facilities for industrial customers; and

·      the supply of mobile water services

 

3.    The CMA also believes that the merger gives rise to a realistic
prospect of a substantial lessening of competition in the following waste
management services, on local bases:

·      the supply of non-hazardous waste incineration services; and

·      the supply of organic waste composting services at open-windrow
composting facilities

 

4.   Under the Enterprise Act 2002 (the Act) the CMA has a duty to make a
reference to Phase 2 if the CMA believes that it is or may be the case that a
relevant merger situation has been created, or arrangements are in progress or
contemplation which, if carried into effect, will result in the creation of a
relevant merger situation; and the creation of that situation has resulted, or
may be expected to result, in a substantial lessening of competition within
any market or markets in the United Kingdom for goods or services.

 

 

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