The Competition and Markets Authority (CMA) has ruled that Veolia’s proposed takeover of Suez could lead to a “substantial lessening of competition” in the UK.
In a statement this morning (07 December), the UK’s competitions body raised concerns that the deal could lead to a loss of competition for council contracts, leading to higher prices for local authorities, leaving taxpayers to foot the bill.The CMA has now referred the merger for a phase 2 investigation, “unless the parties offer acceptable undertakings to address these competition concerns”.
The deadline for undertakings is 14 December.
Veolia and Suez reached an “historic agreement” on a deal worth upwards of £10 billion in April after a very public row spanning several months (see letsrecycle.com story).
Under the terms of the agreement, all of Suez’s operations in the UK will be transferred over to Veolia, subject to regulatory approval.
CMA
In a statement this morning, the CMA said that “in particular”, the deal could hit council contracts for waste management services.
The competitions body said: “The CMA is concerned that Veolia and Suez are two of only a small number of suppliers active within the UK that are able to service the largest and most complex waste management contracts with councils.
“As a result, the merger could lead to higher prices and lower quality services across a range of waste management activities in the UK”. letsrecycle.com - link - Joshua Doherty - link - CMA - link - more like this (France) - link - more like this - link
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