EC Approves Scrap Recycler Ecore Sale to Derichebourg
Strategic Research Institute
Published on :
22 Dec, 2021, 4:32 am
France-based metal scrap recycler Derichebourg announced that it has finalised its takeover of competitor French Groupe Ecore after having received clearance for the transaction from the EU Commission and various international competition authorities. European Commissioner for Competition Ms Margrethe Vestager said “Derichebourg is the leading metal scrap recycler in France and directly competes with Group Ecore on the collection and recycling of metal scrap in several regions in France. Together, they would have had a strong position in these markets and the acquisition would have eliminated an important alternative for customers and suppliers. We approved the acquisition of Group Ecore thanks to comprehensive divestments that will ensure that competition remains vibrant in the French recycling market”.
The Commission had concerns that the transaction, as initially notified, would have raised serious competition concerns. In particular, the Commission's investigation found that the transaction would lead to significant horizontal overlaps between the activities of the companies in the following markets
Collection and recycling of metal scrap, including end-of-life vehicles, in several local markets in France;
Recycling of electrical and electronic equipment scrap in several local markets in France
Commercialisation of shredded ferrous scrap (or ‘E40') in several local markets covering France and neighbouring countries.
The Commission found that the merged entity would have a strong market position and would face limited constraints from competitors in those markets. To address the Commission's competition concerns, Derichebourg offered to
Divest four recycling plants in France incorporating a shredder and four collection sites
Offer, at the option of the purchaser, up to five additional collection sites in France located in the same catchment area of the recycling plants divested, which will contribute to the supply of metal scrap to the shredders
Offer transitional service agreements, including access to all assets and services required to operate the divested business competitively (such as IT services, transport services, or quality, safety and environmental services) for a duration enabling the divested business to become fully independent from Derichebourg
The final commitments, following significant improvements based on the feedback received by market participants, fully address the competition concerns identified by the Commission.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, no longer raises competition concerns. The Commission's decision is conditional upon full compliance with the commitments.
Plans for the merger were announced about a year ago and the purchase agreement signed in early March. None of the parties to the deal have disclosed the value of the transaction. The sellers are Guillaume Dauphin, the former sole owner of Ecore, and the investment company HIG European Capital Partner SAS, which acquired a 49% stake in the company in 2017.
Derichebourg, a subsidiary of the Groupe Derichebourg, is active in the environmental services sector, such as waste collection and recovery and business services like cleaning services. Groupe Ecore operates in the waste management sector, from the collection to the marketing of end-of-life materials. It is mainly involved in the recycling of metal scrap.