ACCC consulting on Veolia’s divestiture offer

The consumer watchdog is seeking feedback on Veolia’s divestiture offer before ruling on whether the French waste management company can acquire fellow French competitor Suez.

France-based Veolia and Suez provide water and waste management in Australia.

In October 2020, Veolia announced its plans to takeover Suez. Both parties agreed to merge in April 2021. 

However, the Australian Competition and Consumer Commission has expressed concerns on the impact the acquisition will have on competition in the waste space in Australia.

Veolia has proposed a divestiture remedy package to address competition concerns which the ACCC is currently considering.

The package means Veolia would divest a collection of Veolia and Suez’s commercial and industrial putrescible waste assets located in Sydney, Perth and Adelaide and Suez’s medical waste assets in Adelaide, to a purchaser approved by the ACCC.

It would also commit Veolia to undertake two deals it and Suez are in the process of making.

In April 2021, Cleanaway agreed to purchase some of Suez’s post-collection waste assets in Sydney, including two landfills and five transfer stations.

This sale is the subject of another ACCC public review.

A month later, in May, Veolia and Suez entered a combination agreement to create a ‘new Suez’ including certain water assets that would be sold to a consortium of investors: Global Infrastructure Management, LLC, Meridian S.A.S. and Caisse des Dépôts et Consignations Group.

ACCC chair Rod Sims said Veolia’s proposed plan was complex.

“The ACCC will need to be satisfied that the undertakings will not only address competition concerns but are also structured in a way that can be relied on to be workable and effective,” he said.

“In a number of markets Veolia and Suez are each other’s closest competitors, so many concerns have arisen with this transaction.”