Veolia and Suez reach merger agreement
Their respective boards of directors reached an agreement in principle on 11 April on the key terms and conditions of the merger. The two groups have agreed on a price of €20.50 per SUEZ share conditional upon the signature of the combination agreement. SUEZ and Veolia have agreed to enter into definitive merger agreements by 14 May.
Subject to obtaining a fairness opinion following applicable regulations, this offer would be recommended by SUEZ’s board of directors upon signature of the definitive agreements. The agreement would allow:
- The creation of a new SUEZ made up of assets forming a coherent and sustainable group from an industrial and social standpoint, with real growth potential, with revenues of around €7 billion;
- The implementation of Veolia’s plan to create a global champion of ecological transformation, with revenues of around €37 billion, through the SUEZ takeover bid, in which all the strategic assets identified by Veolia will remain;
- The reiteration of Veolia’s social commitments for four years after the signature of the offer;
- With a view to the integration and mix of teams, commitments to be made by Veolia regarding the composition of the management teams at headquarters and in the countries.
“We have been calling for a negotiated solution for many weeks and today we have reached an agreement in principle that recognises the value of SUEZ,” said Philippe Varin, chairman of the board of directors at 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 and offer development prospects.”
The two groups propose that the new SUEZ resulting from this agreement should be owned by a group of shareholders including financial partners from both groups and by employees. The majority of the shareholders will be French.
To guarantee the conditions for the long-term development of the new SUEZ:
- Its shareholders will have to subscribe to the social commitments for four years from the closing of the takeover bid;
- Its shareholders will have to undertake to maintain their positions over the long term;
- Its scope will be the municipal water and solid waste activities of SUEZ in France, as well as the activities of SUEZ in particular in water and the following geographies: Italy, the Czech Republic, Africa, Central Asia, India, China, Australia, and the global digital environmental activities.
The agreement in principle also provides for:
- The termination of agreements with Cleanway in accordance with their terms concerning the disposal of the assets in Australia and the suspension of any other significant disposal, which allows Veolia to acquire, in particular, all the assets designated as strategic in its draft offer document filed on 8 February with the Autorité des marchés financiers;
- The deactivation of the Dutch foundation in relation to the SUEZ announcements;
- The suspension of ongoing legal proceedings and, upon signature of the final agreements, the withdrawal of SUEZ and Veolia from all ongoing litigation and the absence of any new proceedings between them;
- The full cooperation of SUEZ, Veolia, and the shareholders of the new SUEZ in obtaining all necessary authorisations (competition, foreign investments, etc.) as quickly as possible and under the best possible conditions.
Antoine Frérot, CEO of Veolia, commented: “I am particularly pleased to announce today the conclusion of an agreement between SUEZ and Veolia that will enable the construction of the world champion of ecological transformation around Veolia, offering 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 it guarantees jobs. All stakeholders in both groups are, therefore, winners. The time for confrontation is over, the time for combination has begun.”