Remondis / DSD deal: Court rejects Remondis' appeal

22.04.2020 − 

The Düsseldorf Higher Regional Court (OLG) has upheld the decision of the German competition authority barring waste management group Remondis from taking over the packaging compliance scheme Duales System Deutschland (DSD), sources close to the deal have told EUWID. Remondis had appealed the decision prohibiting it from acquiring DSD, the original "green dot" system for financing and organising the recovery of packaging waste.

The Court appears to have agreed with the German Federal Cartel Office's position that the acquisition sought by Remondis would have given the concern, already Germany's largest waste management company, a dominant market position that would be detrimental to competition.

In its 50-page ruling, the OLG focussed primarily on the implications of a takeover on the market for container glass cullet. Even if Remondis carried through on its commitments to divest two of its waste glass processing plants, the combined market share controlled by DSD and Remondis still lay about 50 per cent, far ahead of the competition, wrote the Court.

In its written decision, the Düsseldorf Court also addressed the sharp decrease in packaging waste licensing market share experienced by DSD this year. The drop-off came after Aldi, which had been one of DSD's largest customers, decided to license its volumes with Interseroh in January 2020. According to the Federal Cartel Office, the Aldi contract accounts for 10 per cent of the total waste glass volume in Germany.

The Court found that it was possible to put aside the question of whether DSD had not lost the contract entirely involuntarily in an effort to shrink its market share, an allegation made by the German trade association bvse, which represents small and medium-sized recycling enterprises. Even if this were to have been the case, a merger would still give Remondis an unacceptable amount of control in the glass recycling market because the waste group had picked up additional market share at the same time DSD had lost it. In January, Remondis boosted its market share from 10-20 per cent to 30-40 per cent. With that, the combined market share of the transaction partners still came to 50-60 per cent, according to the decision issued on Wednesday.

Full coverage of the decision will appear in the print and e-paper edition of EUWID Recycling & Waste Management 9/2020 out on 29 April.

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