Veolia has today (7 January) sent the Suez board of directors a public offer proposal, detailing how it intends to bid for 70.1% of the company.
Paris-headquartered Veolia is locked in a bitter battle with fellow French waste and resources business Suez over its desire to buy the company, and today urged the Suez board and management team “to cease their destructive stalling tactics”.
Veolia explained in a statement that the proposal letter is in line with its “desire to be perfectly transparent about its proposed project with Suez”.
After announcing its intention to buy Suez in August 2020, Veolia acquired an initial 29.9% stake in the company from a major shareholder in Suez – Engie – in October (see letsrecycle.com story), seen as a prelude to Veolia launching a full bid for its rival.
Veolia explained in today’s letter that it is unable to make a public bid at the moment, but will detail how it intends to do so in an effort “to create a long-term world leader in ecological transformation” – (A formal bid is currently on hold while a legal process of consultation is carried out).
Veolia chief executive Antoine Frérot sent the letter this morning to Philippe Varin, chairman of the Suez Board of Directors.
It said: “For nearly two months, you have complained that in implementing its industrial plan to create a French global champion of ecological transformation, Veolia has until now only given notice of its intention to make a takeover bid for Suez.
“In your opinion, ‘an intention is not a bid’, I take note of what you say. As you know, Veolia cannot formally table such a bid at the present time. But since its inability to do so is temporary, and to move things forward, I set out below the proposed takeover bid for Suez that I will table at the AMF when it becomes possible to do so”.
In its messaging to Suez, Veolia also highlights the positive performance of its shares and highlighting a weaker performance by Suez.
And, Veolia also highlights its “highly experienced leadership team, skilled at delivering on complex industrial projects like our proposed merger with SUEZ”. This includes chief operating officer Estelle Brachlianoff who previously had the UK within her remit before she was succeeded by Gavin Graveson, executive vice-president for the UK.
The letter also states that consolidation of the sector “appears to be inevitable”, and says this has already started, pointing to the purchase of Viridor by KKR and of Urbaser by China Tianying.
“Indeed, such consolidation is necessary, particularly to meet the challenges of financing the increasing Research & Development efforts essential to the development of new environmental technologies, of mobilising the capital necessary to launch model operations for the treatment of hazardous waste or the protection of water resources -both strongly growing sectors”.
The full letter can be read here.
Veolia also restated this week that a merger of the two companies would be good for the environment. Yesterday, it published a manifesto document saying the “environmental emergency” cannot wait any longer, adding that pooling the strengths of Suez and Veolia “could change everything”.
This document said Suez and Veolia are the world’s two leading drivers of the ecological transformation, but added that neither of them can take on the most immense polluters alone, “particularly given that the market capitalisation of the leading chemical producer exceeds that of Veolia by at least three times and that of major oil groups is greater still”.
It added that by expanding in line with a European business model based on a culture of partnership, we can ensure that the specific nature of the relationship between operator and regions is protected.
A response to the Veolia statements has been requested from Suez in Paris by letsrecycle.com.