The Bundeskartellamt has cleared the takeover of Cleanaway Deutschland Holding GmbH (“Cleanaway”) by Sulo GmbH (“Sulo”) subject to conditions. At the request of the companies concerned the merger project was referred from the Commission to the Bundeskartellamt for examination, although the total turnover involved exceeds the 5 billion threshold, because it affects almost exclusively German markets.
Sulo is a joint venture of the Blackstone Group and Apax Partners. The shares in Cleanaway are currently held by the Brambles company group (Australia/U.K.).

Both Sulo and Cleanaway are active in all of the major German waste disposal markets. The merger would have created competition problems in several markets. It would have strengthened dominant market positions already existing in regional markets in Hesse (for the collection and transport of residual waste, waste paper, recovered glass and light-weight packaging and for the sorting of light-weight packaging), in Rhineland-Palatinate/Saarland (for the collection of residual waste and light-weight packaging and for the sorting of light-weight packaging) and in Saxony (for the collection and transport of residual waste). Even before the merger these markets where characterized by dominant positions as the leading suppliers in these markets jointly hold very high market shares, in some cases more than 50 per cent, whereas the market shares of their competitors, mostly small and medium-sized enterprises, are considerably lower.

Furthermore, the major waste-disposal companies are interlinked through joint participations, syndicates and subcontracting.
Sulo and Cleanaway have pledged commitments for the markets affected, to compensate the strengthening effects. As part of these commitments Sulo and Cleanaway now have to sell assets to independent third parties which will eliminate the strengthening effects created by the merger in the respective product and geographic markets.

The President of the Bundeskartellamt, Dr Ulf Böge, stated: “The Bundeskartellamt looks on the growing concentration in the waste management sector with concern. Oligopolistic structures already exist in a large number of waste disposal markets which are characterised by numerous anticompetitive interlocks within the sector. By imposing conditions in the Sulo/Cleanaway merger case the Bundeskartellamt has ensured that in certain areas market positions will not become stronger than they were prior to the merger. The Bundeskartellamt expects further “catch-up mergers” but will continue to counteract any undesired market narrowing within its legal possibilities.”