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Two French waste management giants have declined to allay fears that their 13 billion euro (£11 billion) merger could hike bills for councils across the UK.
The Competition and Markets Authority (CMA) said that it would launch a phase two investigation into the tie-up after its initial findings suggested the deal could harm competition in the UK.
The CMA this month voiced concerns that the two firms are some of only a small number of suppliers that can meet the demands of some of the largest waste management contracts with councils.
They are two of the biggest suppliers to both businesses and councils in collecting waste and running landfill, compost and incineration sites.
“Any loss of competition in this market could lead to higher prices for local authorities, leaving taxpayers to foot the bill, and reduced innovation to achieve net-zero targets,” CMA boss Andrea Coscelli said at the time.
The authority gave Veolia and Suez five days to make suggestions that could allay its fears, or risk facing a phase two probe.
“Everyone in the UK uses waste and recycling services in some way; it is therefore vital that this deal is subject to more detailed scrutiny if our concerns aren’t addressed,” Mr Coscelli added.
On Tuesday, the authority announced Veolia and Suez had declined to make an offer to the regulator.
“The acquirer informed the CMA that it would not be offering any undertakings,” the CMA said.
“The CMA has therefore decided to refer this merger for a phase two investigation.”