The European Commission authorized, Tuesday, December 14, the merger of the two French multinationals of water and waste Veolia and Suez – an operation to 13 billion euros sealed in the spring after months of battle between the two historic rivals. This decision by the Commission, which monitors competition within the European Union (EU), paves the way for the conclusion of a takeover bid (takeover bid) by Veolia for Suez in the coming weeks.
To obtain this authorization, Veolia had to undertake to sell, in particular, most of Suez’s activities in France. In detail, the group will notably have to sell ” almost all “ Suez’s activities in waste and municipal water management in France, ” almost all “ Veolia’s activities in mobile water services in the European Economic Area, “The great majority” Veolia’s activities in industrial water management in France and ” a part “ the activities of the two companies in the treatment of hazardous waste, said the European executive in a press release.
The Commission’s agreement “Is subject to full compliance” of these commitments which “Completely eliminate the competition concerns identified”, underlined the institution. The operation, which was notified in Brussels on October 22, aims to make Veolia “A world champion of ecological transformation”, strengthened in its capacity for innovation in the face of Chinese competition. Veolia will therefore absorb a large part of Suez’s activities abroad: United States, Latin America, Spain, Australia, United Kingdom. It will see its workforce increase from 180,000 to 230,000 employees, and its turnover from 26 to 37 billion euros.
Eight months of arm wrestling
Outside the scope of the merger, the new Suez group, reduced to 40% of the current group and refocused mainly on water and France, will have around 40,000 employees for nearly 7 billion euros in turnover. Held by a consortium made up of French investment funds Meridiam and American Global Infrastructure Partners (GIP) alongside Caisse des Dépôts and CNP Assurances, it will be withdrawn from the stock market.
Veolia, which currently holds 29.9% of the capital of Suez (acquired in October 2020 from the French energy company Engie), launched at the end of July a takeover bid for the remaining 70.1%. Suez fought for a long time to avoid this initially hostile takeover. But, after eight months of a financial, political, judicial and media standoff between the two rival groups for 150 years, he finally accepted the buyout in April, after mediation. The acquisition price was notably raised to 20.50 euros per share, valuing the target at some 13 billion euros.
With the authorization of Brussels, Veolia has already obtained the approval of fifteen competition authorities on the eighteen cases entered. The group is still awaiting authorization from authorities in the United Kingdom, Chile and Australia, but only the decision of the European Commission was likely to block the takeover.