The ACCC is seeking views on divestiture undertakings proposed by Veolia in relation to its proposed acquisition of Suez.
Veolia and Suez are global companies that provide water management, waste management and other related services in Australia.
“Veolia’s proposed divestiture undertakings seek to address competition concerns in markets for various waste and water treatment services in Australia,” ACCC Chair Rod Sims said.
“The nature and structure of the proposed undertakings are complex, with three related but separate divestiture undertakings.”
“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,” Mr Sims said.
The ACCC is consulting market participants until 17 November 2021.
Veolia’s proposed undertakings seek to address preliminary competition concerns in relation to:
- national / multi regional waste collection services to commercial and industrial customers,
- medical waste collections in South Australia,
- putrescible waste disposal in the Sydney region,
- the operation and maintenance of water treatment facilities in Australia, and
- the design and construction of water treatment facilities in Australia.
“In a number of markets Veolia and Suez are each other’s closest competitors, so many concerns have arisen with this transaction,” Mr Sims said.
The divestiture remedy package offered would commit Veolia to 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.
The package would also commit Veolia to divest certain water assets to a specific consortium of investors, and to sell certain post-collection waste assets in Sydney to Cleanaway, another major waste management company in Australia. This proposed sale to Cleanaway is currently the subject of another ACCC public review.
“We look forward to considering the views of market participants and other stakeholders as to whether these undertakings will achieve their intended purpose,” Mr Sims said.
“The release of the three proposed undertakings for public consultation should not be viewed as a signal that the ACCC will ultimately accept the proposed divesture undertakings and not oppose the transaction. We are following our usual practice of publicly consulting when divestitures are proposed.”
More information, including the three undertakings proposed by Veolia is available on the ACCC’s public register.
Background
Veolia is a public company listed and headquartered in France, with operations in 48 countries. In Australia, Veolia supplies water management, waste management and energy solutions through various wholly owned subsidiaries.
Suez is a listed holding company headquartered in France with global operations. In Australia, Suez supplies water management and technology, and waste management and resource recovery services.
The water and post-collection waste asset divestitures are already the subject of pre-existing sale agreements.
On 5 April 2021, Cleanaway and Suez entered into a separate agreement for Cleanaway to purchase certain post-collection waste assets in Sydney, including two landfills and five transfer stations.
On 14 May 2021, Veolia and Suez entered into a Combination Agreement. The Combination Agreement included the creation of a ‘new SUEZ’, comprising certain water assets that would be sold to a Consortium of investors, namely Global Infrastructure Management, LLC, Meridiam S.A.S., and Caisse des Dépôts et Consignations Group (including CNP Assurances S.A.).