Veolia and Suez sign combination agreement

Veolia and Suez announced on Friday (14 May) they had signed a combination agreement, confirming the terms for their proposed merger.

The French-owned companies agreed on a price of €20.50 (£17.71) per share for Suez on 12 April, up from Veolia’s initial €18 offer (see story). At the time, the financial press said this valued Suez at around €13 billion (£11.24 billion).

Veolia and Suez announced they had signed a combination agreement on 14 May

The agreement has now received approval from each company’s board of directors, paving the way for the merger to go ahead by the end of 2021. Veolia will acquire the estimated 70% of Suez it does not already own.

A statement published on Friday said the agreement enabled Veolia to acquire the strategic assets it needed to build “a global champion in ecological transformation”, while guaranteeing a “coherent and sustainable industrial and social footprint” for the new Suez.

Antoine Frérot, chairman and CEO of Veolia, said: “This agreement represents a giant step forward for Veolia, for the French approach to ecological transformation, and for the preservation of the environment.

“I am very happy to welcome the Suez teams to be soon part of our project to build the world champion of ecological transformation, and very satisfied that we will also be able to assure the sound, stable, and sustainable development of the new Suez. As I promised, this is a ‘win-win’ agreement.”

New Suez

Under the terms of the agreement, a ‘new Suez’ will be formed with revenues of €7 billion.

“The agreement between our two groups maintains France’s leading position in essential environmental services”

Philippe Varin, Suez

Last month, a consortium comprising Meridiam SAS, Global Infrastructure Partners (GIP), Caisse des Depots et Consignations (CDC) and CNP Assurances agreed to buy Suez’s municipal water and solid waste activities in France, as well as “the activities of Suez in particular in water” in Italy, the Czech Republic, Africa, Central Asia, India, China and Australia.

In Friday’s statement, Veolia and Suez said they had signed a Memorandum of Understanding with the consortium, following a “satisfactory” offer of undisclosed value.

Meridiam and GIP will each have a 40% stake in the new Suez, while CDC and CNP will have a combined 20%.

Subject to obtaining regulatory and competition approvals, Veolia and Suez hope to conclude the sale of the new Suez to the consortium by the end of 2021.

Philippe Varin, chairman of Suez’s board of directors, said: “The agreement between our two groups maintains France’s leading position in essential environmental services.

“The new Suez will be able to draw on its technological and industrial know-how to develop in the water and waste businesses, with the support of a robust consortium. Veolia will benefit from the support of the teams joining from Suez and will hence pursue its project.”


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