Veolia and SUEZ formalise merger agreement

Veolia and Suez have announced that they signed a combination agreement on Friday (May 14), following approval by their respective Boards of Directors of the latest terms for their merger.

In April, the two French companies reached a merger agreement, which stated that Veolia had agreed to buy the 70.1 per cent of Suez it doesn’t already own for €20.50 per share.

The Combination Agreement confirms that the acquisition will go ahead at that share price and will enable Veolia to acquire the assets needed to pursue its goal of building a ‘global champion in ecological transformation’, according to a joint statement released by the two companies.

“This agreement represents a giant step forward for Veolia, for the French approach to ecological transformation, and for the preservation of the environment,” commented chairman and CEO of Veolia, Antoine Frérot.

“I am very happy to welcome the SUEZ teams to be soon part of our project to build the world champion of ecological transformation, and very satisfied that we will also be able to assure the sound, stable, and sustainable development of the new SUEZ: as I promised, this is a “win-win” agreement”.

The combination agreement has shed more light on the development of a ‘new SUEZ’, which will be created under the Veolia umbrella with a revenue of around €7 billion.

The latest agreement confirms a memorandum of understanding has been signed between SUEZ, Veolia, and the consortium of investors composed of Meridiam–GIP–CDC/CNP, with a view to creating a new SUEZ.

The new Suez is expected to be owned by the Consortium and is likely to cover waste and water services in France, plus water in Italy, Senegal, China and India.

According to their statement, Veolia and Suez have said that the offer from the Consortium remains subject to several conditions, most notably concerning the investors’ confirmatory due diligence.

“The new SUEZ will be able to draw on its technological and industrial know-how to develop in the water and waste businesses, with the support of a robust consortium,” commented Chairman of the Board of Directors of SUEZ, Philippe Varin.

“With this agreement, the new SUEZ will benefit from a robust industrial and technological foundation. Supported by a stable shareholder base with significant employee shareholding, the future Group will be in a strong position to drive international development, with solid investment capacity to ensure the best quality of service for our customers,” added CEO of SUEZ, Bertrand Camus.

The combination agreement has also set out the next steps for the merger, with a public offer of €20.50 per Veolia share and a submission of a binding offer by the consortium expected by 29 June at the latest.

The conclusion of a final agreement with the consortium for the creation of a new SUEZ is expected after the finalisation of an information-consultation process with SUEZ employees, with the sale of the new SUEZ to the consortium currently scheduled for the end of the year.