The Competition and Markets Authority (CMA) has found that the merger of Veolia Environnement SA and Suez SA could lead to a loss of competition and higher prices in the UK waste and water management industry.
The competition watchdog said it has identified a number of competition concerns that could lead to councils paying higher prices, with a knock-on effect on taxpayers.
"Councils spend hundreds of millions of pounds on waste management services. 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,” said Andrea Coscelli, chief executive of the CMA.
The regulator has given the companies five days to address its concerns to avoid an in-depth investigation.
Veolia announced in May that it was buying the 70% stake it did not already own in Suez.