Veolia and Suez agree to merger after long running legal battle
16 Apr 2021 --- French waste management behemoths Veolia and Suez have agreed to a merger, ending a long series of disputes between the corporations’ boards of directors.
The two groups agreed on a price of €20.50 (US$25) per Suez share, subject to the signature of the combination agreement. The majority of shareholders will be French.
It will see the implementation of Veolia’s plan to create a “global champion of ecological transformation,” with revenues of around €37 billion (US$44.3 billion), through the Suez takeover bid, in which all the strategic assets identified by Veolia will remain.
The merger will also result in the creation of a “new Suez” spin-off business, made up of assets forming a “coherent and sustainable” group with revenues of an estimated €7 billion (US$8.3 billion).
Veolia has been working to buy Suez after acquiring a 29.9 percent stake in the business in October from French energy company Engie.
Antoine Frérot, CEO of Veolia, says: “The time for confrontation is over; the time for combination has begun.”
End of a legal battle
Part of the merger agreement will see the termination of Suez’s agreements with Australian waste management company Cleanaway. Earlier this month, Suez agreed to sell its businesses in the country, which generate US$1.4 billion annually, to Cleanaway.
This sparked a fierce legal response from Veolia, who saw Suez’s Australian assets as a key strategic part of its takeover efforts.
Suez has since terminated its agreement with Cleanaway, allowing Veolia to acquire all the assets designated as strategic in its draft offer to Suez.
The agreement will now also trigger the suspension of ongoing legal proceedings between Veolia and Suez.
Philippe Varin, chairman of the board of directors at Suez, says: “We have been calling for a negotiated solution for many weeks, and we have reached an agreement in principle that recognizes the value of Suez.”
“We will be vigilant to ensure that the conditions are met to reach a final agreement that will put an end to the conflict between our two companies and offer development prospects.”
Merger agreements
The two groups have agreed to enter into definitive merger agreements by May 14.
Frérot says the agreement between Suez and Veolia will “offer France a reference player in a sector that is probably the most important of this century.”
“This agreement is beneficial for everyone: It guarantees the long-term future of Suez in France in a way that preserves competition, and it guarantees jobs. All stakeholders in both groups are therefore winners.”
Edited
By Louis Gore-Langton
