Economy: Brussels authorizes the French Veolia to buy its rival Suez

Europe 1 with AFP 9:07 p.m., December 14, 2021

Brussels on Tuesday authorized the merger of the two French water and waste giants Veolia and Suez, an operation worth 13 billion euros sealed in the spring after months of battle between the two historic rivals.

This decision by the European Commission, which watches over competition in the EU, paves the way for the conclusion of a takeover bid by Veolia for Suez in the coming weeks.

To obtain this green light, Veolia, world number one in its businesses, had to commit to divesting most of Suez's activities in France.

Several commitments to respect

In detail, the group will notably have to sell "almost all" of Suez's activities in waste management and municipal water in France, "almost all" of Veolia's activities in the mobile services of the water in the European Economic Area, "the vast majority" of Veolia's activities in the management of industrial water in France and "part" of the activities of the two companies in the treatment of hazardous waste, the executive added. European in a press release. The green light "is subject to full compliance" with these commitments which "completely eliminate the competition problems identified", stressed the Commission.

The operation, which was notified in Brussels on October 22, aims to make Veolia "a world champion of ecological transformation", strengthened in its capacity for innovation in the face of Chinese competition.

Veolia will therefore absorb a large part of Suez's international activities: United States, Latin America, Spain, Australia, United Kingdom.

It will see its workforce increase from 180,000 to 230,000 employees and its turnover from 26 to 37 billion euros.

Suez will be withdrawn from the Stock Exchange

Outside the scope of the merger, the new Suez group, reduced to 40% of the current group and refocused mainly on water and France, will have around 40,000 employees for nearly 7 billion euros in turnover. Held by a consortium made up of the French Meridiam and American funds GIP alongside the Caisse des Dépôts / CNP Assurances, it will be withdrawn from the Stock Exchange. Veolia, which currently holds 29.9% of the capital of Suez (acquired in October 2020 from the French energy company Engie), launched a takeover bid at the end of July for the remaining 70.1%.

Suez fought for a long time to avoid this initially hostile takeover.

But, after eight months of a financial, political, judicial and media standoff between the two rival groups for 150 years, he finally accepted the buyout in April, after mediation.

The acquisition price was notably raised to 20.50 euros per share, valuing the target at some 13 billion euros.

With the green light from Brussels, Veolia has already obtained the approval of 15 competition authorities out of the 18 seizures of the case.

The group is still awaiting authorization from authorities in the United Kingdom, Chile and Australia, but only the decision of the European Commission was likely to block the takeover.