The waste management market comprises businesses which collect, transport, process, recycle and/or dispose of different waste types, including metals, organic waste, plastics, paper, glass and textiles among others. Accordingly, we segmented the European market based on the material type(s) processed into (i) diversified, (ii) specialist - metal and (iii) specialist - non-metal.

The European waste management market is highly fragmented. A few large multinationals (e.g. Veolia, Remondis, FCC) are followed by a long tail of regional, often privately-owned small players. The market participants also include state- or municipality-owned waste managers, which have not been covered in this research. The industry is consolidating, driven by multiple arbitrage opportunities for smaller buy-and-build targets, as well as succession problems and regulations (e.g. EU metals export control) disproportionately impacting smaller players.

Sponsor-led activity has been moderate, with ~30% of identified assets being backed by financial sponsors (December 2022). Investors are typically hesitant to invest in the space due to limited pricing power, capital-intensive operations and inherent dependence on state regulations. Nevertheless, low exposure to economic cycles, recurring revenue streams and the potential for a favourable sustainability positioning have proven to be attractive factors for certain sponsors.

ESG topics are centred around the positive environmental influence of recycling activities, i.e. extending materials’ economic life and decreasing share of incinerated and landfill waste. However, the waste exports to developing countries and frequent regulatory breaches have tainted the industry’s reputation on the social and governance fronts.