Suez and Veolia reach agreement on merger

Just hours before the deal was struck on Sunday, Veolia
urged shareholders to oust Suez's board.
12.04.2021 − 

Environmental service giants Suez and Veolia reached an agreement in principle on a merger on Sunday evening, ending months of increasingly acrimonious administrative and legal wrangling. "The time for confrontation is over, the time for combination has begun,” said Veolia CEO Antoine Frérot. According to statements issued on Monday morning by Suez and Veolia, the concerns had agreed to sales price of €20.50 per Suez share. In early February, Veolia had offered Suez shareholders €18 per share. This was the same price paid by Veolia for the 29.9 per cent stake in Suez it acquired from the French energy company Engie.

Under the terms of the preliminary agreement, Veolia is to acquire major segments of Suez's international activities. These would include Suez's waste management operations in the UK and Australia, which Veolia considers "strategic". Accordingly, Suez would withdraw from its agreement with the Australian company Cleanaway, which was to purchase all of Suez's waste management activities in that country. The concern will instead sell Cleanaway only a selected sub-set of its Australian waste activities.

After the merger, the focus of Suez's activities will be in water and waste water, although the concern will retain its waste management activities on its home market of France. The concern emerging from the transaction would consist of "assets forming a coherent and sustainable group from an industrial and social standpoint, with real growth potential, with revenues of around €7bn," the companies said in their announcements. Last year, Suez's annual revenues stood at €18m. For its part, Veolia implements its plan to create "a global champion of ecological transformation" with annual revenues of around €37bn. Veolia had generated revenues of €26bn in 2020.

The rivals said they had committed to entering into definitive merger agreements by May 14.

The full report on the agreement will appear in EUWID Recycling & Waste Management 8/2021, out next week.

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