Council tax warning as mega-£31BN merger puts ‘hundreds of millions of pounds’ at risk | City & Business | Finance

The Competition and Markets Authority (CMA) have issued the warning after reviewing plans for Veolia and Suez to merge, a deal also being reviewed by a number of other competition authorities around the world. During the investigation the CMA says it has received a number of complaints from customers and other market participants raising the alarm over competition concerns if two such large companies merge. Veolia and Suez are two of the largest suppliers in an already very small market of firms able to handle the largest and most complex waste management contracts with councils. With this competition further reduced, the CMA are warning a knock-on effect could be higher prices and lower quality services.

CMA chief executive Andrea Coscelli said: “Councils spend hundreds of millions of pounds on waste management services.

“Any loss of competition in this market could lead to higher prices for local authorities, leaving taxpayers to foot the bill, and reduced innovation to achieve Net Zero targets.

“Everyone in the UK uses waste and recycling services in some way, it is therefore vital that this deal is subject to more detailed scrutiny if our concerns aren’t addressed.

“The CMA also identified competition concerns in several water management markets, where insufficient competition after the merger could mean that industrial customers would also have to pay higher prices.”

The merger agreement was signed back in May 2021 with the board of directors of Suez recommending an offer from Veolia to buy it out for a value of €10.4billion (£8.83billion).

The agreement came following a long public spat over Veolia’s battle to buy its rival which turned into a hostile takeover earlier this year.

The new deal has been agreed based on some parts of Suez’s French business being left independent.

According to announcements from the two companies the merger will result in a new entity expected to enjoy a combined revenue of nearly €37billion (£31.44billion).

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The CMA began formally investigating in October but had been previously involved after Veolia acquired a 29.9 percent stake in Suez last year.

The EU has also been investigating the merger and is expected to announce a decision on December 14. has contacted both Veolia and Suez for comment.

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