The Bundeskartellamt has issued a decision requiring the Rethmann Group, which includes the waste management company Remondis, to notify future mergers in certain economic sectors before they are executed. This obligation applies to mergers involving the collection of non-hazardous household waste, including residual, organic, bulky waste, paper, cardboard, and mixed packaging, as well as the processing of hollow glass, provided the target company has a minimum revenue of €100,000 in the relevant sectors.

This decision marks the first application of a regulation introduced in 2021 and adjusted at the end of 2023, which allows the authority to require notification of mergers that typically do not fall under the obligation for review of their competitive effects.

Andreas Mundt, President of the Bundeskartellamt, stated that the general revenue thresholds for merger notifications can lead to smaller company acquisitions escaping competitive scrutiny. In regional waste management markets, smaller companies often play a crucial role in local competition. The Rethmann Group is a leading player in the waste management sector nationwide, and this decision aims to ensure that even the acquisition of smaller competitors is subject to effective control.

Normally, mergers are only subject to scrutiny by the Bundeskartellamt above a certain economic size defined by minimum revenues. Following several increases in these thresholds, the acquisition of smaller companies is often not subject to notification, as they frequently do not meet the minimum revenue of €17.5 million. In this context, the law has created the possibility to require companies to notify such acquisitions, provided that the Bundeskartellamt has conducted a sector inquiry and found objective indications that future mergers involving the obligated company could significantly impede effective competition in the country.

Mundt emphasized that the assessment that the acquisition of relatively small competitors by the Rethmann Group could potentially harm competition is based on the results of a sector inquiry completed at the end of 2023. The Rethmann Group holds significant market shares and is a market leader in several federal states in the collection of non-hazardous municipal waste and the processing of used glass.

The sector inquiry revealed that Rethmann Group companies have a strong presence in Germany, providing them with excellent access to the affected regional sales and procurement markets, as well as significant financial strength. The markets are characterized by high barriers to entry, while continuous consolidation is observed, particularly due to the acquisition activities of the Rethmann Group. The number of bidders participating in municipal tenders has also been steadily decreasing. The acquisition of smaller, potentially regionally active competitors could further weaken competition in these areas.

The decision is not yet legally binding, and the Rethmann Group can appeal against it to the Higher Regional Court of Düsseldorf.