The documents were published yesterday (13 October) and are out for consultation until 26 October. They are a standard part of the CMA’s investigation process and signify that a conclusion is getting closer, a year on from when it commenced its inquiry into the Veolia and Suez merger.
At the heart of the documents is a call for Veolia to put prospective purchasers forward for a number of divestments – Veolia has not only to divest Suez UK’s waste activities, but also some water sector business which it acquired from Suez earlier this year.
None of the prospective purchasers of Veolia’s Suez UK businesses, including on the waste side with Suez recycling and recovery UK, are actually named in the final undertaking documents.
This is not seen as unusual and could mean that the CMA is not raising any issues at present about the prospective purchasers. It would therefore appear that the authority is content with the idea that Suez recycling and recovery UK will be sold to the newly formed French-owned Suez S.A. business. If that deal were to fall through, Macquarie has also offered to buy the business (see letsrecycle.com story).
Acquisition
The complex sale situation stems from the acquisition of most of Suez by Veolia earlier this year, in an agreement in the pair’s home country of France. Some parts of Suez were not taken on by Veolia; these went to a new company which had the right to the Suez name and is called Suez S.A. based in France. This is the Suez that is now planning to buy Suez recycling and recovery UK.
Within the published draft final undertaking documents there is signature space for Veolia and related parties to sign off the undertaking. Once this happens the next stage would be for the CMA to check out and likely approve a sale to Suez S.A..
CMA approval of the onward sale of Suez recycling and recovery UK is not expected until November at the earliest, with the Final Undertaking documents needing to be completed and agreed and any comments dealt with. Assuming the CMA is content with the undertakings, then the Suez S.A. sale proposal will be scrutinised. If the CMA is not content, it could issue further measures, although there is also some leeway in the timetable if there are any special considerations.
Eventually, when a sale is agreed it is likely that Veolia will have a period of time to implement the sale.
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