It is the end of several months of conflict between Veolia and Suez, the two French specialists in water and waste management. The two groups announced that they had signed, Friday May 14, “A definitive merger agreement”. It will allow the first to acquire a large share of the second “While guaranteeing a coherent industrial and social scope” for the remaining activities of Suez.
An agreement in principle has also been signed between the two groups and a consortium of investors made up of the Meridiam and GIP funds, as well as the Caisse des Dépôts (with its subsidiary CNP Assurance), which will buy back this fund. “New Suez”, mentions the press release.
This agreement, concluded by the two groups in a lounge at the Bristol hotel in Paris on April 12, fixes a purchase price of Suez by Veolia of 20.50 euros per share, for a total amount of 12.8 billion euros. ‘euros.
It puts an end to an unprecedented struggle between the two French groups which began on August 30, 2020, when Veolia expressed its wish to buy from Engie the 29.9% of the capital of Suez that it held and then launch an offer. public takeover bid (OPA) on the remaining capital at a price of 18 euros per share.
The announcement had provoked an outcry in the ranks of Suez. A battle then began in the legal and regulatory field with the culmination of the creation, in September 2020 by Suez, of a foundation under Dutch law where certain assets were housed in order to protect them. an offer from Veolia.
Veolia hopes to launch its takeover bid by the end of the third quarter
The peace treaty validated on Friday by the boards of directors of the two groups provides for the deactivation of this foundation, the termination of the agreements concluded by Suez for the sale of some of its activities in Australia to the group Cleanaway Waste Management, the suspension of all ongoing proceedings and the commitment not to initiate new litigation.
Veolia, which has already obtained the green light from five competition authorities including that of the United States, hopes to launch its takeover bid by the end of the third quarter. At the end of the operation, it will post a turnover of around 37 billion euros, against 26 billion in 2020. The group will strengthen its presence in several markets including the United States and Spain .
Veolia then undertakes to sell assets that will allow the creation of a “New Suez”, focused on French water and waste treatment activities. This new entity will maintain operations abroad through certain international assets, including activities in India, Italy and China.
The new Suez will post a turnover of around 7 billion euros, less than half of the current Suez, whose sales represented 17.2 billion euros in 2020. It should be taken over by the fund. French investment Meridiam and American GIP up to 40% each, and the Caisse des Dépôts for the remaining 20%. The agreement provides for an increase in the capital of employees up to 10%.
This peace treaty sets several conditions for future shareholders of the new Suez, such as a minimum ten-year commitment and job guarantees for Suez employees for a period of four years.
This agreement, which ended the conflict between the two groups, was concluded through mediation by Gérard Mestrallet, former leader of Suez and Engie. The Minister of the Economy and Finance, Bruno Le Maire, welcomed ” The sense of responsibilities “ demonstrated by all parties.