Veolia proposes the sale of Suez's UK waste business after CMA merger inquiry

The Competition and Markets Authority (CMA) found the merge likely to reduce competition in the UK's waste management and water treatment services.
Veolia proposes the sale of Suez's UK waste business after CMA merger inquiry

In their inquiry into the Veolia Suez merge, the CMA concluded that the acquisition of Suez by Veolia 'will remove an important competitor from several markets, and that this could result in higher prices to customers (eg. via worse bid terms or higher gate fees) and/or a poorer quality of service'.

The following were considered by the CMA to be at risk from lessened competition through the Veolia and Suez merger:

  • collection of non-hazardous waste for municipal customers
  • operation and maintenance services for sorting of waste for municipal customers
  • operation and maintenance of Energy Recovery facilities (ie incineration) for municipal customers
  • supply of incineration services for customers in 2 local areas
  • collection of non-hazardous waste for commercial and industrial customers
  • operation and maintenance services for water and wastewater treatment facilities to industrial customers
  • provision of mobile water services to industrial customers

Stuart McIntosh, Chair of the CMA inquiry group, said: "We all use waste and recycling services in some way, so it’s vital that these markets are competitive and provide good value for money. This is all the more important at a time when local authority budgets are already stretched and waste management services have to evolve to help achieve Net Zero targets."

In response to the announcement of the inquiry's conclusions, Veolia has made the 'drastic decision' to sell all of Suez UK's services and treatments in response to the 'intransigence' of the CMA whilst saying that they 'strongly disagree with their analysis of the concerned markets and deplores the lack of shared understanding of the issues related to our sectors of activity.'

In a statement, Veolia said that they "regret that the CMA's analysis will not allow the Group to deploy the full potential of the ecological transformation in the United Kingdom, but it does not reduce our commitment to this region. It does not affect the overall scope of Veolia's project, whose capacity to create value remains intact."

With the acquisition of Suez, Veolia planned to 'be global champion of ecological transformation by bringing together Veolia and most of Suez's international activities' with over 40,000 employees merging.

However, Veolia announced that: “In order to terminate this long period of waiting, but above all to be able to fully focus on the creation of the world champion…Veolia has informed the CMA on Monday (13 June) of its intention to sell all of Suez’s waste activities in the country”.

An anonymous large and well-established waste management company in the UK, Company X, has already notified the CMA that they believe they would be suitable for buying Suez from Veolia on the basis of the CMA's assessment criteria.

Read more about the CMA's inquiry here.