This includes Suez’s UK waste management services business as well as its UK industrial water operation and its European mobile water services business.
The CMA said these businesses “make up almost all of the overlap” between Veolia’s and Suez’s competing operations in the UK.
The decision against the merger confirms the CMA’s provisional ruling in May, and Veolia has already taken steps to sell its UK waste business.
It agreed a €2.4 billion (£2.02 billion) deal with Macquarie for the sale of Suez’s UK’s recycling assets (see letsrecycle.com story), but the deal could still be matched by the ‘New Suez’ (see letsrecycle.com story).
Local authority budgets are already under strain
- Stuart McIntosh, chair of the CMA inquiry group
Approve
The CMA has reiterated that it will determine the conditions of the sale, as well as the sales of the two water services businesses.
The CMA will also need to approve the purchasers of each business before the completion of each sale.
Stuart McIntosh, chair of the CMA inquiry group, said: “Local authority budgets are already under strain, and this deal is likely to lead to them paying more and receiving a lower-quality service. The negative impact would have ultimately fallen on taxpayers at a time when they are feeling the pressure of the cost of living crisis.
“Given our concerns about the merger, we have concluded that Veolia must sell most of the operations it took over in the UK when it acquired Suez. We will now work with Veolia to ensure that appropriate buyers are found so that businesses, councils – and ultimately taxpayers – will not lose out.
Ruling
The CMA’s summary of its final report, published this morning, confirms its provisional findings issued in May. It rules that the merger would lead to competition concerns in five waste markets.
These are:
- Non-hazardous municipal waste collection
- Operation and maintenance services for material recovery facilities to local authorities
- Services for energy recovery facilities to local authorities
- The supply of waste disposal services by incineration in the local areas surrounding Suez’s Wilton 11 and Teesside ERFs
- Non-hazardous commercial and industrial (C&I) waste collection services
The report says: “The CMA found that this would be likely to result in higher cost or lower quality services for councils, with knock-on effects for taxpayers, as well as businesses across the UK.
“Throughout the investigation, the CMA heard from a number of councils and customers who were concerned about the potential impact of the merger on the cost and quality of the services they receive. Ultimately, taxpayers and businesses would have been left to cover any increase in cost.”
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