(Reuters). Britain’s antitrust regulator said that the merger of French waste management group Veolia, and Suez could lead to less competition in Britain and higher costs for UK governments.

Veolia and Suez are two of only a small number of suppliers in Britain that are able to service the largest waste management contracts, the Competition and Markets Authority (CMA) said https://www.gov.uk/government/news/cma-finds-veolia-suez-merger-raises-competition-concerns in a statement on Tuesday.

Veolia replied that it was looking into ways to assure customers, competitors, and the British regulator that the deal will not affect the market balance.

Both companies have been given five days by the UK regulator to make proposals. The CMA may request a further investigation if it isn’t satisfied with the undertakings.

Councils have spent hundreds of millions on waste management services. Andrea Coscelli, chief of CMA, stated that any loss in competition could result in higher prices for local authorities and taxpayers footing the bill.

Sources told Reuters that the French companies have offered to sell additional assets in order to alleviate competition worries in the European Union. They agreed to a deal in April for a merger worth nearly 13 billion euro ($14.6 billion).

Veolia stated that it has already received 14 of 18 authorizations worldwide.

Veolia stated that it remains confident that the combination of Suez and Veolia can be done under conditions that maintain healthy competition in the UK.

If the UK concludes there are concerns about competition, it can order the sale of or divestment part of the entire business.

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