Uk

French waste and water tie-up risks rise to UK bills, regulator warns

UK competition regulators have warned that the €13bn merger of French waste and water groups Veolia and Suez risks driving up council bills in Britain because the deal will cut the choice available to local authorities.

Paris-based Veolia agreed to buy Suez in April 2021 after an acrimonious pursuit that erupted into a public dispute between the two rivals, which are the world’s largest waste and water companies.

Since reaching an agreement, the two companies have agreed to sell off a number of businesses to win backing for the deal from 17 antitrust authorities, including Brussels. The UK’s Competition and Markets Authority, which began investigating the tie-up in October, is the only regulator that the companies still need approval from.

In provisional findings released on Thursday, the CMA said the combination of the groups would lead to “more costly and lower quality services” as local authorities in the UK would face less choice.

Veolia and Suez both have multiple waste management contracts with UK local authorities. The regulator concluded that the deal raised competition concerns in seven of the eight UK markets within the waste and water management sector that the probe has focused on.

Stuart McIntosh, chair of the CMA inquiry group, said that the regulator had “heard from a number of customers, including local authorities, who are concerned that this merger could reduce competition in markets where choice is already limited, leading to higher prices or poorer services.”

In a list of suggested remedies released alongside its findings, the CMA said that Veolia should either sell its entire UK waste business or that of Suez.

Veolia earned €2.1bn in the UK and Ireland in 2020 on worldwide turnover of €26bn. Suez reported more than €17.2bn in global turnover, with about €900mn generated in the UK.

Veolia had hoped to resolve its competition issues by the end of last year but the process has proved protracted after the CMA opened an in-depth probe last December.

Veolia sees the suggested remedies from the CMA as a starting point for negotiations, according to people familiar with the matter, and ultimately expect authorities to approve the deal after some concessions.

Since the deal closed in January, the companies have been able to largely integrate their businesses around the world. The CMA has permitted them to integrate their businesses in all countries with the exception of the UK.

The regulator is seeking responses to its provisional findings by June 9 before it releases a final report in July.

Veolia declined to comment.

File source

Tags
Show More
Back to top button
Close