Veolia climbs after the sale of Suez’s waste activities in the United Kingdom to Macquarie for 2.4 billion euros











Photo credit © Veolia


(Boursier.com) — Veolia sells Suez’s UK waste business to Macquarie. The French environmental services giant announced this morning the signing of a unilateral purchase agreement by which Macquarie Asset Management irrevocably undertakes to acquire 100% of the capital of Suez Recycling and Recovery UK Group Holdings. The sale proceeds for Veolia will represent approximately 2.4 billion euros.

An effective response to the main concerns of the UK competition authority

The completion of this transaction provides an effective response to the main concerns of the British competition authority (Competition and Markets Authority). It remains subject to its approval as well as to the lifting of the right of first refusal granted by Veolia to the new Suez on the occasion of the merger in 2021. Following the completion of this antitrust remedy, Veolia will remain a major player in the waste treatment market in the United Kingdom with a turnover of approximately 2 billion euros.

The valuation level of this disposal, showing a multiple of 16.9x normalized 2021 EBITDA, stands at a level significantly higher than the acquisition price resulting from the takeover bid price. This price level makes it possible to immediately crystallize the value of all the synergies then envisaged.

Around 3.4 billion euros in disposals

After the disposal of the remedies, agreed with the European Commission, and the signature of the agreement with Macquarie Asset Management, almost all of the antitrust disposals will have been finalized less than a year after the acquisition of Suez and on the basis of an average multiple of 15x 2021 EBITDA, confirming the great attractiveness of the assets acquired as part of the merger with Suez. All of these disposals, the amount of which represents approximately 3.4 billion euros, and in particular this last transaction, will bring the Group’s debt leverage significantly below 3x. They will thus give Veolia additional investment capacity to finance growth in high value-added markets.

“We are very satisfied with this transaction, which is taking place under excellent conditions, which once again demonstrate the great attractiveness of the activities of environmental services and the relevance of our proposal for remedies to the CMA. It will allow a strong creation of value while strengthening our investment capacity in strategic markets. The valuation of these assets reflects both the initial price and the synergies provided for by the merger, in line with all the disposals carried out within the framework of the antitrust authorizations, which are higher than the acquisition price of Suez”, comments Estelle Brachlianoff, Chief Executive Officer of Veolia.

Stock goes up

The market welcomes this operation with a title that takes 3.3% to 24.8 euros at the opening. “The sale is good news to put an end to some concerns that have been going on for months,” Nicolas Bouthors, an analyst at AlphaValue (‘buy’), told ‘Bloomberg’. According to the latter, the transaction should eliminate all questions of competition across the Channel, while in terms of valuation, the price is “satisfactory” and higher than the average multiple applied to the Suez operation, but this is not surprising since it is one of the most profitable units of the group.


©2022 Boursier.com






Source link -87