Paris-based Veolia has announced that Paris-based Suez has exercised its right of first refusal with respect to Vigie’s UK waste business and that the companies have reached a unilateral put option agreement under which Suez will acquire 100 percent of the share capital of Suez Recycling and Recovery UK Group Holdings Ltd. for 2 billion pounds.
Vigie UK is the name given by Veolia to assets that it bought from Suez and is now selling back to the company.
Veolia and Suez had announced plans to merge nearly two years ago; however, the U.K. Competition and Markets Authority (CMA) investigated the merger given that Veolia and Suez were two of the largest suppliers of waste management services in the United Kingdom. In late August, the CMA had required Veolia to sell three of its businesses as a result of its in-depth investigation into the merger. According to the CMA, Veolia has been required to sell the following parts of its merged businesses:
- Suez’s U.K. waste management service businesses (Vigie UK);
- Suez’s U.K. industrial water operation and maintenance services business; and
- Veolia’s European mobile water services business.
CMA says these three businesses make up the majority of the overlap between Veolia’s and Suez’s competing operations in the U.K.
Veolia says the transaction of Vigie UK to Suez is subject to the CMA’s approval.
According to a news release from Veolia, the exercise of its first refusal right by Suez follows Veolia’s announcement of its agreement to sell the Vigie UK business to Australia-based Macquarie Group, regrouping Suez waste activities in the U.K. That agreement, which was announced Aug. 8, enabled the company to address CMA’s concerns.
“The progress of the merger with Suez, which began last January, continues to demonstrate the relevance and value-creation capacity of our project to create the global champion of ecological transformation in the context of a strong climate and ecological emergency. The cash proceeds from the antitrust divestments will allow us to reduce the debt leverage and will provide Veolia with additional capacity to finance growth in high value-added markets,” says Estelle Brachlianoff, chief executive officer of Veolia. “We are satisfied that this disposal addresses the main concerns of the U.K. competition authority. The U.K. will remain an important region for Veolia where we will continue to implement sustainable and competitive ecological transformation solutions as a leading player in the local waste management market with revenues of 2 billion euros.”