EU grants conditional approval for Prezero acquisition of Suez waste management activities


The European Commission announced yesterday that it had approved the sale of the majority of Suez's waste management activities in Germany, the Netherlands, Luxembourg and Poland to Prezero. The approval is conditional on the divestiture of Suez's lightweight packaging (“LWP”) sorting business in the Netherlands. "With the divestment of Suez' sorting plant in the Netherlands, the acquisition can go ahead while preserving effective competition in the sorting of plastic waste market in the Netherlands,” said EU Competition Commissioner Margrethe Vestager.

According to the EU Commission, both Suez and Prezero are leaders in the sorting of lightweight packaging originating in the Netherlands. As a result, the Commission had been concerned that the proposed acquisition, as originally notified, would have significantly reduced the level of competition in the market for the sorting of LWP in the Netherlands. The merged entity would have become by far the largest market player, owning more than half of the capacity for LWP sorting in the Netherlands.

In order to facilitate competition clearance, the Schwarz Group offered to divest the entirety of Suez's LWP sorting business in the Netherlands, including Suez's LWP sorting plant in Rotterdam and all assets necessary for its operation.

Acquisition valued at over €1bn

The business units earmarked for sale generated sales of €1.1bn in 2019 and are also valued at €1.1bn in the transaction. Suez put the earnings before interest, taxes, depreciation and amortisation (Ebitda) of the included activities at around €100 million for the 2019 financial year. Suez expects the sale to be completed in the first half of the year.

However, the scope of the proposed sale has excluded the German packaging waste recovery system Belland Vision, Suez's hazardous waste business in Germany and the Netherlands, plastics recycling activities in the Netherlands and water and environmental activities in Poland. Whether these activities will be part of the "new Suez" or whether they will instead go to Veolia is still open. Suez agreed to the general terms of a merger with its rival last weekend after months of fighting off a takeover.

Prezero already took over Suez's waste management activities in Sweden. The transaction was based on an enterprise value of €357m.

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