Commission approves the acquisition of certain waste management companies from Suez by the Schwarz group, under certain conditions
The European Commission has approved under the EU Merger Regulation the acquisition of certain Suez waste management companies in Germany, Luxembourg, the Netherlands and Poland by the Schwarz group. The approval is conditional on the divestiture of Suez’s lightweight packaging sorting (LWP) business in the Netherlands.
Executive Vice President Margrethe Vestager, in charge of competition policy, said: âCompetitive markets at all levels of the recycling chain are a crucial contribution to a more circular economy and essential to achieve the goals of the Green Deal . With the sale of the Suez sorting plant in the Netherlands, the acquisition can continue while preserving effective competition in the plastic waste sorting market in the Netherlands. “
Both the Schwarz group and the relevant Suez waste management companies are active along the waste management chain in several countries. In particular, the two companies are leaders in the sorting of light packaging originating in the Netherlands.
The Commission’s investigation
The Commission was concerned that the proposed acquisition, as initially notified, had significantly reduced the level of competition in the LWP sorting market in the Netherlands.
In particular, the Commission’s investigation revealed that the merged entity would become by far the largest player in the market, holding more than half of LWP’s sorting capacity in the Netherlands, and a key business partner for Dutch customers.
The Commission found that competitors outside the Netherlands exert a lower competitive constraint, as customers prefer waste to be sorted as close as possible to the collection point in order to minimize the financial cost and CO2 emissions from road transport.
The remedies offered
To address the Commission’s competition concerns, the Schwarz Group has proposed to divest all of Suez’s LWP sorting activities in the Netherlands, including the LWP Suez sorting plant in Rotterdam and all the assets necessary for its operation.
These commitments completely eliminate the overlap between the Schwarz group and the waste management companies in Suez concerned for the sorting of wood waste in the Netherlands.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional on full compliance with the commitments.
Companies and products
The Schwarz group, based in Germany, is active in food distribution in more than 30 countries through its distribution chains Lidl and Kaufland. It also operates as an integrated service provider in the field of waste management through its commercial division PreZero.
The Suez waste management companies concerned, subsidiaries of the French group Suez, are active in the collection, sorting, treatment, recycling and disposal of household and commercial waste in Germany, Luxembourg, the Netherlands and Poland.
Merger control rules and procedures
The transaction was notified to the Commission on February 19, 2021.
The Commission has the duty to assess mergers and acquisitions involving companies whose turnover exceeds certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations which would significantly impede effective competition in the EEA or a substantial part of it.
The vast majority of notified mergers do not pose competition concerns and are cleared after a routine review. From the moment a transaction is notified, the Commission usually has a total of 25 working days to decide whether to grant approval (phase I) or launch an in-depth investigation (phase II). This period is extended to 35 working days in cases where appeals are presented by the parties, as in the present case.
Further information will be available on the Commission’s competition website, in the Commission’s public business register, under number M.10047.