European Commission approves the acquisition of Suez by Veolia, subject to conditions
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The European Commission has approved, under the EU Merger
Regulation, the proposed acquisition of Suez by Veolia. The
approval is conditional on full compliance with a commitments
package offered by Veolia. 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...Request free trial
The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Suez by Veolia. The approval is conditional on full compliance with a commitments package offered by Veolia. 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." 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 Commission's investigation The Commission's investigation revealed that the transaction, as initially notified, would have raised competition concerns. More specifically, the transaction would lead to significant horizontal overlaps in various markets in France and in the European Economic Area (EEA), mainly in the following markets: (i) municipal water management, (ii) industrial water management in France and mobile water services in the EEA, (iii) the collection and treatment of non-hazardous and regulated waste and (iv) the treatment of hazardous waste in France. Such overlaps would risk eliminating the competitive pressure exerted by Suez and creating a market leader at European and national and/or local level, depending on the markets concerned. Customers would therefore have faced a reduced choice of service solutions, often limited to the merged entity, without having any real bargaining power. The investigation confirmed that the proposed transaction did not raise competition concerns in the other markets in the water and waste management sectors. The transaction also creates vertical and conglomerate links, which, however, do not raise competition concerns. Proposed corrective measures To address the Commission's competition concerns, Veolia offered a commitments package including:
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. Companies and products concerned Veolia is a French group active in France and worldwide mainly in the sectors related to (i) water treatment, including municipal water and industrial water management services, the design and construction of water treatment facilities, the provision of technological solutions and chemicals for water treatment, and the provision of mobile water solutions; and (ii) the provision of services related to waste management, with the collection and treatment of non-hazardous, regulated and hazardous waste. Suez is a French group primarily active, in France and worldwide, in the sectors of (i) the provision of services related to municipal and industrial water treatment, the design and construction of water treatment facilities, the provision of technological solutions and chemicals for water treatment, and the provision of mobile water solutions; and (ii) the provision of services related to the management of non-hazardous, regulated and hazardous waste. Merger control rules and procedures The transaction was notified to the Commission on 22 October 2021. The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it. The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). If commitments are proposed in Phase I, the Commission has 10 additional working days, bringing the total duration of a Phase I case to 35 working days, as in this case. More information will be available on the Commission's competition website, in the public case register under the case number M.9969. |