Suez Recycling and Recovery UK is set to remain independent after the international Suez business exercised an option to buy it from Veolia for £2.0bn.
The Competition and Markets Authority (CMA) had blocked the merger of Veolia and Suez in the UK due to fears that it would lessen competition in particular in the local authority markets.
As part of the agreement made by Veolia with regulations when it took over the global former Suez company, certain businesses were packaged into a continuing Suez company.
It is this that wants to buy Suez Recycling and Recovery UK subject to the CMA’s agreement.
Under the agreement with Veolia it had first refusal on buying the UK assets and so had to only match a rival bid by the finance firm Macquarie.
The company said its UK operation had more than 25,000 industrial and municipal customers, employed around 6,000 people and had a turnover of more than £900m.
Suez Group chair and chief executive Sabrina Soussan said: “The acquisition of Suez R&R UK will significantly bolster the strategy of Suez, strengthening our waste treatment activities and diversifying our global footprint.
“This acquisition highlights once again the trust our shareholders place in our company: our Group has the capital required for its development as well as the necessary resources to invest alongside its clients
John Scanlon, chief executive of Suez Recycling and Recovery UK, said: “Four weeks ago the Competition and Markets Authority published its final decision and Veolia confirmed it would sell our UK business.
“The Suez Group has now triggered the right of first refusal which was part of the merger agreement between the Veolia and Suez groups made back in January 2022, and started the process of matching the offer made by Macquarie Group.”
Scanlon said that if the CMA gave approval he looked forward to the deal “allowing us to continue with our work to create a more resource efficient, circular economy, delivering on our commitment to People and Planet”.
Estelle Brachlianoff, chief executive of Veolia, said: “The progress of the merger with Suez, which began last January, continues to demonstrate the relevance and value-creation capacity of our project to create the global champion of ecological transformation in the context of a strong climate and ecological emergency.”
She said the UK “will remain an important region for Veolia where we will continue to implement sustainable and competitive ecological transformation solutions as a leading player in the local waste management market with revenues of €2bn (£1.74bn).”