Veolia and Suez agree on takeover

The takeover of Suez by Veolia seems to become reality. Both companies announced the 12^th of April they agreed to a ‘merger’. Veolia will pay a price of € 20.50 per Suez share, that is € 2,50 more they offered to pay in the summer of 2020. It was not love at first sight between the French giants. They have been fighting for years. Suez was never willing to become part of Veolia. With the agreement ends a period of conflict between the two competitors.

The agreement of Veolia and Suez was published in a press release. Both companies are active in the global market for wastewater and drinking water. At this moment Suez is valued at approximately € 13 billion. The agreement between Veolia and Suez must be finalized on 14 May. The regulators in various countries still have to give green light. After the news was revealed the Suez share on the Paris stock exchange closed 7.73% higher at € 19.86. Veolia’s share price increased by 9.66% to € 24.75.

World champion

Thanks to the acquisition Veolia grows into an environmental group with a turnover of € 37 billion. With the merger CEO Antoine Frérot aims to become stronger against the Chinese competition and he wants to develop Veolia into a ‘French world champion of ecological transformation’. “Given that we are getting most of the assets we really wanted for our project, this deal will create great value for the Suez shareholders”, Frérot said at a press conference.

Final agreement

Chairman of the Board of Directors of Suez Philippe Varin stated: “We have been calling for a negotiated solution for many weeks and we have reached an agreement that recognizes the value of Suez. We will be vigilant to ensure that the conditions are met to reach a final agreement that will put an end to the conflict between our two companies.”

Win-win

According to Frérot of Veolia the takeover will offer France a reference player in a sector that is probably the most important of this century. “This agreement is beneficial for everyone: it guarantees the long-term future of Suez in France in a way that preserves competition and guarantees jobs. All stakeholders in both groups are therefore winners. The time for confrontation is over, the time for combination has begun.”

Global activities

Now Veolia and Suez have agreed on a takeover a Suez will change. The scope of the new Suez will be the municipal water and solid waste activities of Suez in France (including CIRSEE, the main research center in France), as well as the water activities of Suez. Also activities in the following geographies are included: Italy (including the stake in Acea), the Czech Republic, Africa (including Lydec), Central Asia, India, China, Australia, and the global digital and environmental activities (SES).