Veolia aims to buy stake in Suez as first step towards full take-over

Antoine Frérot, Chairman and CEO of Veolia
Antoine Frérot, chairman and CEO of Veolia, called
the proposed transaction a "historic opportunity"
31.08.2020 − 

The French environmental services giant Veolia has launched a takeover bid for competitor Suez, having made an offer for nearly 30 per cent of Suez's shares owned by the French utility concern Engie (formerly GDF Suez). If its offer is accepted by Engie, Veolia said it intended to subsequently file a voluntary tender offer for the remaining Suez shares "as soon as the necessary regulatory authoritisations, in particular with respect to competition, have been obtained". The group expects that process to take on the order of twelve to 18 months.

In its Sunday announcement of the stock purchase offer, Veolia said that it had "already identified the limited antitrust issues that such a transaction would entail, and has anticipated remedies". These primarily involved Suez's French water activities, which Veolia plans to sell to the French infrastructure management company Meridiam. "The other identified areas of competition would concern certain waste management activities in France and a very few cases outside France," according to the announcement.

Veolia said on Sunday that it was making an all-cash proposal, offering Engie €15.50 per share. The gas and electricity utility holds 31.7 per cent of Suez's shares and had announced at the end of July that it was launching a strategic review of part of its client solutions business, which includes its holding in Suez, and would "consider opportunities to divest non-core businesses and minority stakes". Veolia said it was offering is a 50 per cent premium on the value of the share just prior to Engie's announcement of the review. The total value of the offer is €2.88bn.

For its part, Suez said that it "takes note of the press release of its competitor Veolia". According to Suez, Veolia's approach is unsolicited and has not been discussed with Suez prior to its announcement. "Suez will convene its board of directors shortly in order to study the operation as well as its contemplated impacts, in view of the interest of the company, its shareholders, its employees and all its stakeholders," said the company.

Antoine Frérot, the chairman and CEO of Veolia, said, ”This historic opportunity will enable us to build the French world champion in ecological transformation, while accelerating international development and strengthening the new entity's capacity for innovation.This project is part of a friendly approach, as we share the same businesses, corporate culture and values with Suez."

Full coverage of Veolia's plans for the acquisition of Suez appear in the print and e-paper edition of EUWID Recycling & Waste Management 18/2020 out on 2 September.

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