Veolia Faces Deadline to Divest Moroccan Water Subsidiary After Suez Merger

The Competition Council has given Veolia, which was in charge of water and sanitation management in the cities of Tangier and Rabat, a one-month ultimatum to resell Lydec, Suez’s former subsidiary. In a decision made public on October 4, it "orders the company Veolia, either to comply with its decision to authorize the economic concentration operation, or to return to the state prior to the concentration and this, within a maximum period of thirty days," reports Le Figaro.

It all started with Veolia’s acquisition of the majority of Suez’s activities by its rival. An operation that has been effective since January 2022, after seven months of battles and four days of negotiations. On September 30, 2021, the Moroccan Competition Council had authorized "the company to acquire exclusive control of the company Suez S.A. with a concomitant sale of certain activities and assets of the latter, including the Moroccan company Lydec". From then on, Veolia owns 51% of Lydec (the share held by Suez). The French water giant then buys back the bulk of the remaining shares on the stock market. The value of the company was estimated at around 200 million euros.

More than a year and a half later, the discussions between the new Suez and its shareholders have not been conclusive. Hence the ultimatum given to Veolia to resell Lydec, Suez’s former subsidiary, whose turnover is around 800 million euros. Enough to put Veolia in difficulty. It risks paying a fine of up to 5% of the turnover concerned if it does not find a buyer.