Editorial of the “World”. Capitalism is decidedly predictable. In a takeover bid, once everyone has evoked major principles, formulated promises which bind only those who believe them, argues that his strategy is the most promising for the future, the justice of the peace always remains the price agreed by the assailant. The takeover of Suez by Veolia, which seemed insurmountable in recent months, is no exception to this rule. The second had to raise its offer of 1.6 billion euros, Monday, April 12, with some marginal adjustments compared to the initial offer, to overcome the last reluctance of the first.
It is to be congratulated that common sense has ended up winning in this Franco-French duel, which, by prolonging itself, would have ended up weakening the two champions of water and waste management. The point of no return had almost been reached with the legal guerrilla warfare led by Suez, which seemed to have exploited all possible remedies so as not to fall into the hands of its competitor.
A few days ago, Suez was called to order in an unprecedented way by the Autorité des marchés financiers (AMF), which considered that the defense deployed by Philippe Varin and Bertrand Camus, respectively Chairman and Chief Executive Officer of the group , violated stock market law by no longer respecting the free play of offers and their bidding.
Public utility mediation
Beyond the specific case of Veolia’s takeover bid for Suez, it was the reputation of the Paris financial center that was allegedly damaged. From this point of view, Gérard Mestrallet, former president of Suez and ex-president of Paris Europlace, was able to conduct public utility mediation between the various protagonists.
More essential still, the compromise found does not lead to the butchering that opponents of the rapprochement feared. Suez’s integrity is guaranteed, both socially and industrially. The operation results in the maintenance of an entity focused on French activities in municipal water and waste. The group will remain a significant competitor of Veolia, preventing the latter from abusing its dominant position on the national market.
Even if the perimeter of Suez is found cut by ten billion euros of turnover, the new company sees itself endowed with a a priori solid capital, held mainly by French investment funds. Far from disappearing body and soul, the group is refocusing on activities with higher added value, which open up promising strategic prospects in water treatment in Europe, but also in Africa and Asia.
For its part, Veolia, thanks to the contribution of Suez activities located abroad, will be able to carry out its project of “world champion of ecological transformation”, with 37 billion in turnover, capable of growing. find itself in a good position to participate in the future consolidation of the sector. The CEO of Veolia, Antoine Frérot, aims for a rapid increase in the profitability of the new group, at the cost of a surge in debt, which is growing a little more due to the increase in the purchase price. It will be judged on documents.
In the meantime, despite the last-minute concessions wrested by Suez, the operation is a total success for him. Antoine Frérot succeeds where Henri Proglio, his predecessor at Veolia, and Gérard Mestrallet, the ex-boss of Suez, had failed. Proof that, if his intuition was ambitious, it should not be as bad as some claimed.