Remondis, Germany's largest waste management company, has made a formal offer for a minority stake in "new Suez". According to Remondis, it was made in a letter to Suez board chairman Philippe Varin and CEO Bertrand Camus last Friday. The extension of the offer followed several meetings between the top management of the two groups, said Remondis.
Word that the German company wished to invest in the “new Suez” was leaked to the media some two weeks ago. Now there is official confirmation from Remondis that it wishes to purchase a 20 per cent stake in the Suez activities that will be sold on by Veolia after it takes over its competitor. Those shares had been earmarked for European investors, but were at least theoretically up for grabs after the French investment company Ardian, which Suez had designated as a buyer, withdrew from the proceedings.
Remondis explained that it was willing to increase the scope of its offer to include up to 40 per cent of the new entity’s capital. "Remondis supports and accepts the principle that the majority of the capital should remain in the hands of French shareholders," the statement said.
In his letter to Mssrs Varin and Camus, Remondis chairman Ludger Rethmann noted that his concern would not need external financing to complete the transaction. Mr Rethmann also expressed confidence that his proposal would not face any anti-trust barriers, according to the statement issued by Remondis this past weekend.
Remondis would contribute its international water activities
Remondis is offering more than just cash. Should Remondis' offer be accepted, the German waste management market leader wants to integrate its international water activities into the "new Suez". It would also seek to transfer its waste business in France to the new group. The concern expressed its full support for the geographical footprint envisaged by Veolia and Suez for the new group to emerge following the merger of the environmental services giants. The markets for the "new Suez" are to include France, Italy and the Czech Republic. The company is also to retain activities in Asia, Australia and New Zealand as well as in Africa and the Middle East. The focus of the business outside of France will be largely water activities, while within Suez's home market France, the new group will also include waste management operations.
Remondis also seeks to bundle its own research and development activities with those of he new Suez. The concern highlighted phosphorous recovery from waste water as potential area of cooperation.
Remondis plans long-term investment
The Germany waste management company says it is prepared to commit to an investment horizon of more than 20 years. This, the group stressed, would guarantee a "European shareholder base" for new Suez. "Remondis is committed to maintaining the integrity of new Suez's group activities and to preventing any attempt to break up strategic and long-term assets in whole or in part," according to the concern statement.
Like the other potential shareholders, Remondis said it is prepared to guarantee all employment and social benefits for a period of at least four years from the completion of the proposed transaction. In addition, Remondis said that it fully accepted the decisions taken regarding the employees' share in the capital of the new Suez.