In a statement issued by Suez yesterday (10 September), the company said the approach was “against the best interests of Suez and all its stakeholders, and in particular its shareholders, its employees and its clients”.
French waste management giant Veolia announced on 30 August it had offered €2.9 billion to French utilities firm Engie for its 29.9% stake in Suez (see letsrecycle.com story). Veolia then wants to make an offer for the whole of Suez once it has acquired Engie’s shares.
At the time, Veolia described the bid as a “friendly approach as we share the same businesses, corporate culture and values”.
Suez’s statement reads: “As communicated in the press release dated August 31st, 2020, and based on available information, the board of directors has continued its thorough review of Veolia’s proposed transaction, which carries significant uncertainties and is subject to criticism on a number of fundamental aspects.
“The overall structure of the transaction contemplated by Veolia is questionable and exposes SUEZ and its shareholders to a long period of disruption for the Group with a risk of a takeover on an unacceptable basis.”
At Wednesday’s meeting the board concluded the price offered by Veolia to Engie ‘wholly’ undervalued Suez.
Veolia’s takeover project comes with “major antitrust and regulatory issues” in France and abroad, Suez says. The acquisition of the 29.9% stake will, the company claims, be subject to several specific regulatory approvals.
Veolia’s project ignores “major execution risks and dyssynergies”, Suez says.
The company says the “value creation strategy” of the project is primarily driven by “significant cost synergies”, which has led Suez’s 90,000 employees to voice concerns about their employment and future within the company.
Clients, municipalities and communities in France and abroad have expressed strong reluctance about Veolia’s project, Suez claims.
As such, Suez’s board of directors said it affirmed its full support to its management team to execute and accelerate the Suez 2030 strategic plan and explore alternatives to Veolia’s proposal in the interests of the group and all its stakeholders.
Suez 2030 plan
Suez says it is to update the market shortly on the progress of the Suez 2030 plan and is reviewing options to accelerate this strategy in the interest of all its stakeholders. Suez 2030 is described as a comprehensive strategic plan to position the company for the opportunities and the challenges of the next decade. The plan enhances value creation for all stakeholders over four years with material results as soon as 2021, Suez says.
The plan, Suez says, is endorsed by clients, municipalities and employees.