Veolia to divest Suez UK waste business for $2.4B

Veolia Environment SA, branded as Veolia, has agreed to sell Suez SA’s waste activities in Britain to Australia-based Macquarie Group Ltd. for $2.44 billion (2.4 billion euros), reports Bloomberg.

The announcement comes after the country’s antitrust authority—the U.K. Competition and Markets Authority (CMA)—raised competition concerns, citing that Veolia’s acquisition of Suez’s business “may hurt competition in the water and waste treatment sector and drive up prices at a time when consumers are already being squeezed.”

“It’s a very attractive valuation,” Estelle Brachlianoff, CEO of Veolia, said Aug. 8 on a conference call. According to Bloomberg, Brachlianoff also expressed that the sale proceeds will give the firm “room to maneuver on [its] balance sheet to invest in strategic projects” by lowering the company’s debt leverage.

The completed transaction marks the last step in the company’s acquisition of a large chunk of French rival Suez, which was completed in other parts of the world earlier this year. Following the completion of the antitrust remedy, Veolia will remain a significant player in the U.K. waste management market with revenues of approximately $2 billion.  

The sale remains subject to approval by the CMA. In addition, an investor group led by France-based Meridiam SAS and New York-based Global Infrastructure Partners—which bought Suez’s business in France and other countries—also has the right to make an offer for the U.K. assets by matching Macquarie’s offering.

As reported by Bloomberg, waste and recycling collection companies have recently received increased interest from international financial investors. Last year, Macquarie agreed to buy Australian waste management company Bingo Industries Ltd. for $2.26 billion. In June, U.K. company Biffa received a potential bid from New Jersey-based Energy Capital Partners LLC. 

Macquarie has made major investments in the U.S., as well, completing a significant equity investment in Rosemont, Illinois-based LRS in 2021. The firm also acquired the former assets of Wheelabrator and Tunnel Hill Partners, now a part of WIN Waste Innovations, in 2019. This private ownership still remains in place.