French utility Suez SA has struck a €2bn (£1.75bn) deal with Veolia Environment to buy back the UK waste management business it agreed to sell off to its rival last January.
Suez has scuppered Macquarie’s bid to buy the British unit after the Australian asset manager struck a deal to acquire the UK business for €2.4bn last month, after striking its own deal to snap up the waste management firm.
Suez’ deal comes after Veolia first set out plans to sell off the UK unit last month, following an intervention from Britain’s competition watchdog over concerns the acquisition could lead to “higher prices and lower-quality services”.
The watchdog’s intervention came after the two French firms – which have been rivals since the 19th century – entered into a €12.8bn merger agreement last April, with a view to creating a “global champion” in the waste management sector.
The UK waste management business is currently the country’s third largest waste recycling and recovery company, in employing more than 6,000 workers and generating annual turnovers of more than £900m.
Sydney headquartered financier Macquarie later struck a deal to fully acquire the business for €2.4bn in a bid to address the Competition and Markets Authority’s (CMA’s) concerns.
However, Suez is now set to use its pre-emption rights to buy back the British assets, after its board and asset manager owners – Meridiam and Global Infrastructure Partners (GIP) – approved the plans.
Suez chief executive Sabrina Soussan said the deal “highlights once again the trust our shareholders place in our company” as she said the acquisition sits in line with Suez strategy to strengthen its waste treatment activities and diversify its global footprint.
The multi-billion deal will mean Suez will continue to act as a competitor to its larger rival Veolia in one of the largest waste management markets in Europe.
John Scanlon, the head of Suez UK recycling and recovery unit, 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 Limited.”