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Remondis seeks to buy stake in "new Suez"

Symbolic photo of a ring binder labelled "Due Diligence"
Remondis seeks to buy 40 per cent of the "new Suez"
28.04.2021 − 

Remondis, Germany's largest waste management company, is looking to acquire a holding in the Suez activities to be resold after the group's takeover by competitor Veolia. Remondis board chairman Ludger Rethmann conveyed his company's interest in a letter which was sent at the beginning of the week. In the letter, Mr Rethman extends an offer to purchase 40 percent of the "new Suez". Remondis would then be a minority shareholder alongside the French investment fund Meridiam, the state bank Bank Caisse des Dépôts et Consignations (CDC) and Suez's employee shareholders.

The offer from Remondis comes shortly after the consortium consisting of the French investment fund Ardian and the US fund GIP (Global Infrastructure Partners) decided they would not purchase the 40 per cent of the "new Suez" offered to them under a deal struck between Suez and Veolia. Under the agreement in principle reached by the environmental services giants on 11 April, a further 40 per cent was to go to Meridiam, and 10 per cent each to the CDC and employee shareholders. Remondis now appears eager to expand its own activities by filling the gap left after the Ardian/GIP withdrawal.

The takeover would involve those segments of Suez's current business that are to be spun off into a new company after the takeover by Veolia. The activities of the "new Suez" are to be concentrated in the water business, but will also include waste management activities in Suez's home market of France. Outside France, the company will be active in Italy, the Czech Republic, Africa, Central Asia, India, China and Australia, primarily in the water sector.

The group will also keep its Smart & Environmental Solutions (SES) segment, which develops digital solutions and new environmental activities, and its Cirsee water and environment research centre in Paris, which specialises in water and waste water, waste recycling and data analysis. The new company will have an annual turnover of €7bn from these remaining activities, according to the joint statement provided by Suez and Veolia when they announced their agreement in principle. The details of the transaction are to be finalised by 14 May.

Remondis wants to integrate own activities into the new entity

An investment in the "new Suez" would be a marked expansion in Remondis's activities, particularly in France. Until now, the German waste management market leader has been active on the French market only through its e-scrap recycling subsidiary, the mineral waste company Remex, the clinical waste specialist Remondis Medison, and the industrial services company Buchen. Remondis's sister company Saria, which focuses on animal by-products and food waste, is also active in France.

In his letter, Mr Rethmann also pledges to "actively contribute to the development of the Franco-German strategic partnership, which is essential for the future of Europe". Remondis also wants to incorporate its international water activities and French waste activities into the "new Suez".

The goal, as Remondis sees it, is to create a very strong and competitive company. The German waste management company pledges to support the job security and workers' rights commitments made by the other parties to the transaction. Its would also commit to the long-term development of the company and providing a stable ownership structure. Rethmann would also commit to support the company as an industrial partner on its path to growth to prevent a further break-up of Suez.

Remondis does not need external financing for its participation in the "new Suez". The group also does not see any anti-trust obstacles to its proposal.

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