Veolia

The merger of the two world’s largest waste management companies meant that Independent Managers were needed to assist with the divestment of certain Australian businesses. 

Background

In April 2021, Veolia and Suez, the world’s two largest waste management companies, agreed to merge. Due to competition concerns in Australia, Veolia provided Enforceable Undertakings (‘EUs’) to the ACCC, agreeing to divest certain Australian businesses. The EUs required Independent Managers (‘IMs’) be appointed to operate the businesses separately from Veolia/Suez from the date of the merger until the businesses were sold to a third party
 

How we helped 

 Scott Langdon and John Mouawad were engaged in November 2021 to prepare Separation and Management Plans (‘SMPs’), detailing how the businesses would be operated and held separate. On 19 January 2022, Veolia completed the acquisition of Suez, and Scott and John were formally appointed IMs by the ACCC for the following businesses:  

• Suez Water  
• Commercial and Industrial Collections (‘C&I’) businesses
  • Suez South Australia  
  • Suez Seven Hills Transfer Station  
  • Veolia Jandakot Depot  
  • Certain Suez National C&I Customer Contracts. 

The KordaMentha team were based at operational locations on a full-time basis during the appointment as IMs across three states (NSW, SA and WA) to control and manage operations. This approach ensured the team were very close to day-to-day operations and fully integrated into the business.   

The key workstreams were:  

Separation of the business: the businesses were required to be held separate from, and operating in competition against, both Veolia and Suez. This required separation of IT systems, books and records and employees from Veolia and Suez, and the implementation of separation protocols, new organisational structures, reporting lines, and delegation of authority limits.  

Management of the businesses: the IMs were responsible for all decision making for the businesses as Veolia and Suez were not permitted to exercise decision making powers. This included strategic decision making, submitting customer tenders, contract negotiations and addressing operational issues.  

Reporting to the ACCC: monthly update reports were provided to the ACCC to report on the performance of the businesses, the implementation of the SMPs and compliance with the EUs.  

Sale integration: the IMs facilitated the completion of the sale of the businesses by responding to purchaser information requests, planning integration activities and workshops, obtaining counterparty consents to assignment and facilitating engagement between staff and the purchaser.  

Outcome  

The outcome of this engagement was the successful operation and separation of the four waste management businesses. The sale of Suez Water to an investor consortium completed on 30 January 2022, while the sale of the C&I business to Remondis completed on 8 April 2022. The independent management and successful sale of these businesses ensured that strong competition was maintained in the Australian waste management market.