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Commission approves acquisition of certain Suez waste management companies by the Schwarz Group, subject to conditions

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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 (LWP) sorting business in the Netherlands.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “Competitive markets at every level of the recycling chain are a crucial contribution to a more circular economy and essential to achieve the objectives of the Green Deal. With the divestment of Suez' sorting plant in the Netherlands, the acquisition can go ahead while preserving effective competition in the sorting of plastic waste market in the Netherlands.”

Both the Schwarz Group and the Suez waste management companies concerned are active across the waste management chain in several countries. In particular, the two companies are leaders in the sorting of lightweight packaging originating in the Netherlands.

The Commission's investigation

The Commission had concerns that the proposed acquisition, as originally notified, would have significantly reduced the level of competition in the market for the sorting of LWP in the Netherlands.

In particular, the Commission's investigation found that the merged entity would become by far the largest market player, owning more than half of the capacity for LWP sorting in the Netherlands, and an unavoidable trading partner to Dutch customers.

The Commission found that competitors located outside of the Netherlands exert a weaker competitive constraint, as customers prefer for waste to be sorted as close to the collection point as possible in order to minimise the financial cost and CO2 emissions associated with road transport.

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The proposed remedies

To address the Commission's competition concerns, the Schwarz Group offered to divest the entirety of Suez's LWP sorting business in the Netherlands, including Suez's LWP sorting plant in Rotterdam and all assets necessary for its operation.

These commitments fully remove the overlap between the Schwarz Group and the Suez waste management companies concerned for the sorting of LWP 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 upon full compliance with the commitments.

Companies and products

The Schwarz Group, based in Germany, is active in food retailing in over 30 countries through its retail chains Lidl and Kaufland. It also operates as an integrated service provider in the field of waste management through its PreZero business division.

The Suez waste management companies concerned, subsidiaries of the French Suez group, 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 19 February 2021.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). This deadline is extended to 35 working days in cases where remedies are submitted by the parties, such as in this case.

More information will be available on the Commission's competition website, in the Commission's public case register under the case number M.10047.

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