European Commission approves Veolia purchase of Suez

The European Commission has announced the approval under its merger regulation process of the proposed acquisition of Suez by Veolia.

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In a statement, the Commission said that the approval is conditional on “full compliance with a commitments package offered by Veolia”.

Within the European Union area this would mean the creation of a larger Veolia business with global aims. In the UK, the Competition and Markets Authority (CMA) is still to rule on the ‘merger’ in the UK.

The CMA is currently undertaking a phase one study and is seen as taking a similar approach to the European Commission in that it may seek undertakings along the lines of a commitment package. It is thought that a decision will be made before Christmas as to whether agreement could be reached in the UK at phase one stage, or the CMA may move the process to phase two stage.

Global champion

The size of the new company was highlighted in a statement from Veolia which said it welcomes the Commission’s “decision to approve the acquisition of Suez.” Veolia added: “This is a decisive step in the creation of a global champion of ecological transformation, as the green light from the European Commission is a key factor in the realization of Veolia’s industrial project.”

Veolia said it had worked closely with the European Commission to address all its competition concerns.

Commitments

For the European Commission, executive vice-president Margrethe Vestager, in charge of competition policy, said: “Thanks to the very comprehensive commitments put forward by Veolia, the Commission has been able to approve the concentration of Veolia and Suez, two French incumbents in the water and waste sectors. By this decision, the Commission ensures that this transaction will not adversely affect competition in the water and waste markets, two sectors that are key to the European Green Deal and the circular economy.”

A ruling in the UK is still awaited

The Commission’s statement noted: “Veolia and Suez are leaders in the water treatment and waste management sectors. The two companies offer a wide range of services to municipal and industrial customers and compete in the following sectors, among others:

  • The water sector, in particular for the provision of services relating to the design and construction of water treatment system facilities, the operation and maintenance of these water treatment facilities, the supply of water treatment chemicals and the provision of mobile water solutions; and
  • The waste sector, specifically for the provision of services relating to the collection and treatment of non-hazardous, regulated (subject to specific regulations) and hazardous waste.

On proposed corrective measures, the Commission said that to address the Commission’s competition concerns, Veolia offered a commitments package including:

  • The divestment of almost all Suez’s activities in the non-hazardous and regulated waste management markets and the municipal water market in France;
  • The divestment of almost all Veolia’s activities in the mobile water services market in the EEA;
  • The divestment of the vast majority of Veolia’s activities in the French segment of the industrial water management market; and
    The divestment of part of Veolia’s and Suez’s hazardous waste landfill activities and all Suez’s activities in the incineration and physico-chemical treatment of hazardous waste.
  • These structural commitments eliminate entirely the competition concerns raised by the Commission with regard to Veolia’s acquisition of Suez. The Commission has therefore concluded that the proposed transaction, as modified by the commitments, would not raise any competition concerns.

The Commission’s decision is conditional upon full compliance with the commitments, it said.

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