The Macquarie fund agrees to buy it for 2.4 billion euros. The new Suez has one month to preempt it.
Forced to separate from a strategic activity, Veolia will be able to console itself by extracting a high price. The French environmental services giant announced on Monday that it had reached an agreement with the Australian Macquarie Group to sell it the former waste activities of Suez in the United Kingdom for 2.4 billion euros. This transaction “provides an effective response to the main concerns of the UK Competition and Markets Authority”who had expressed concerns after the announcement of the takeover of Suez by Veolia, underlines the latter.
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The agreement values the entity to sell 17 times its Ebitda. “A level clearly higher than the acquisition price resulting from the price of the takeover bid” on Suez in 2021, underlines Veolia. Enough to “immediately crystallize the value of all the synergies then envisaged”, insists the group. All of the disposals made at the request of the European and British competition authorities will bring Veolia 3.4 billion euros. “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”notes Estelle Brachlianoff, CEO of Veolia.
Right of first refusal
If Veolia is sure and certain to collect 2.4 billion euros from the sale of the former British activities of Suez, it is not necessarily the fund of 523 billion euros of Macquarie Group, Macquarie AM, which will the buyer. The Australian has certainly signed a “a unilateral promise to purchase” by which he “irrevocably undertakes” to buy out the British entity, as Veolia points out. Clearly, the agreement with Macquarie allows Veolia to notch a price, but that does not end the case.
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British activities are indeed of interest to the “new Suez”, the part of the old group that Veolia sold to a Franco-American consortium to have its takeover bid accepted by the Competition Authority and by Suez shareholders. The new Suez has already bought its former French branch of hazardous waste in the spring. During the 2021 takeover bid, Veolia’s rival negotiated a “first refusal clause” for any sale of an entity that belonged to it. “Suez confirms its interest in acquiring the former assets of Suez R&R in the UK and will study in detail the terms of the agreement reached with Macquarie, following which Suez will decide whether or not to exercise its right of first refusal”, says Suez. The group has thirty days to decide whether or not to resume its former British activities, at the price negotiated between Veolia and the Australian fund.
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