The war is open between French environmental companies. While the doldrums lie in wait with the poor economic figures due to the health crisis, the CAC40 will be able to come alive with the announcement of a major takeover proposal in the sector. The water and waste treatment giant Veolia indeed aims to constitute a "world super champion" by integrating its competitor Suez.
Takeover bid should follow
For this, Veolia gave Engie, a large shareholder of Suez, a firm offer of 2.9 billion euros on Sunday, covering most of its stake. The offer concerns 29.9% of Suez, of which Engie holds a total of 32%. If this transaction is successful, Veolia intends to subsequently file a takeover bid for the remainder of the shares. The repurchase of the whole is estimated at some 10 billion, to which is added the debt of Suez.
A historic opportunity that will help build the great French world champion in ecological transformation.
A merger project built around 5 pillars. https://t.co/thTGEYtZT1 pic.twitter.com/yZr3ZwXksZ
Suez, which had presented in October a strategic plan to dethrone its rival from its number one place, "took note" of the choice of its competitor. “Veolia's approach has not been requested and has not been the subject of any discussion with Suez”, which will meet its board of directors “as soon as possible”.
A project in "the sense of history"
Engie for his part said on Sunday evening that he would "study the proposal in the coming weeks". The energy giant announced in July its desire to refocus its activity, by selling assets considered non-strategic. "Concerning Suez, I would say that everything is open", then declared the chairman of the board of directors, Jean-Pierre Clamadieu.
For the CEO of Veolia, Antoine Frérot, the project announced Sunday goes "in the direction of history". The meeting of Veolia, already world number one in the sector, and Suez, number two, is the subject of regular speculation. The two groups posted a cumulative turnover of some 45 billion euros last year, in an increasingly competitive field internationally. The sector remains very fragmented, and the new entity would represent even less than 5% of market share at the global level. But "the concentration has started", warns Antoine Frérot, noting the growing interest of investment funds for the sector or the rise of players from China.
For Veolia, employment will not be affected
If the two parties come to an agreement, the transaction must however obtain the approval of the competition authorities. Antoine Frérot evokes "significant competition problems" especially in France, but rarely abroad and "strong complementarity". Veolia indicates that it has already identified a buyer for the activities of Suez Eau France, in the person of Meridiam, a French infrastructure management company, which has committed to this acquisition. According to Antoine Frérot, a meeting of the two groups would have no negative impact on employment in France, including for water on the Meridiam side.
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- Economy
- Environment
- Redemption
- Engie
- Merger
- Veolia
- Suez