Suez lines up retaking old UK waste business after Veolia tussle
French groups wait on British antitrust regulator’s judgment before settling fate of operation
Reshaped French waste and water company Suez is preparing a bid to buy back its old UK business if Britain’s competition regulator blocks a takeover of the unit by its longstanding rival Veolia.
Suez has first refusal on the British waste business should it have to be sold, two people close to the matter said, and at a price set by Veolia. The company would be keen to take it back, in a deal that would be worth several hundred million pounds, one of the people said.
Veolia had agreed to take over the UK operations as part of a complex and acrimonious takeover battle that culminated in a €13bn deal sealed in 2021 between two French groups that have been rivals since the 19th century and are among the world’s biggest players in the fragmented waste and water industry.
Under the terms of that deal, Suez held on to the bulk of its operations in France, where there were major antitrust concerns, and continued to exist as its own entity with new investors, including infrastructure funds, while its international presence was largely whittled down.
The Competition and Markets Authority in the UK — the only country where antitrust issues have not been resolved — is due to pronounce judgment on the Veolia-Suez tie-up by July 17. It had already flagged in May that the British end of the merger risked driving up council bills by cutting the choice of rubbish treatment and collection providers.
That could result in Veolia having to offer more remedies and sell off part of its business in the UK, or give up its plan to take on Suez’s British unit altogether.
Veolia, Suez and the CMA declined to comment.
The groups have already had to sell off several businesses to clear antitrust issues with 17 other competition authorities, including Brussels. Some scenarios have already benefited Suez, which bought Veolia’s prized hazardous waste business in France for an enterprise value of €690mn in May this year.
Now owned by investors including French infrastructure group Meridiam and Global Infrastructure Partners of the US, Suez has annual revenues of around €7bn and 35,000 employees. Its former UK business — which has not yet been integrated into Veolia, and is operating as a standalone unit for now — has some 6,000 workers.
Veolia earned €2.1bn in the UK and Ireland in 2020, out of global sales of €26bn. Suez reported more than €17.2bn in global turnover, with about €900mn generated in the UK.