CMA investigation delaying Veolia’s influence over Suez

Engie shares

The document is Veolia’s “Notice & information brochure for the Combined General Meeting for Veolia Environnement” on June 15. This references a specific block of 29.9% of Suez shares which Veolia acquired in October 2020 from a separate business, Engie. Subsequently, the Suez board agreed to sell out to Veolia, its large French rival.

Because there is a “merger control procedure” still ongoing in the UK, this means that rights attached to the 29.9% of shares mean Veolia cannot have a representative on the Suez Board of Directors, or “freely use its voting rights” to influence Suez policies across the world.

For Veolia the Suez takeover is described as “forming a new group bringing together the greatest talent, best expertise and finest knowledge base in the world.” But the UK’s impact on its involvement with Suez is currently a major stumbling block because of the rules around the Engie shares.

The inability to fully manage Suez, as well as the strong performance of Veolia’s UK business, show how important it is for the business globally for a a positive conclusion to the CMA investigation to be reached. It is expected that the next stage will come in June or July and may see Veolia agree to some disposals.

UK performance

The business success of Veolia in the UK is highlighted in the document which also confirms a new job title for the UK chief, Gavin Graveson, as “Director of the Northern Europe Zone”, a post which he took on earlier this year.

The General Meeting document section on Veolia’s Northern Europe division, reports in 2021 that revenue grew at +7.6% year-on-year to €3,276 million.

And, it says: “This increase is mainly driven by the United Kingdom and Ireland, which recorded a 8.5% increase in revenue at constant exchange rates to €2,423 million due to higher recyclate prices (paper and metal), a recovery in industrial waste and landfill volumes to almost pre-health crisis levels and excellent incinerator performance (facility availability rate of 94.9% in 2021 compared with 94.1% in 2020).”