Veolia conquers Suez to create an environmental giant - France 24

Paris (AFP)

The water and waste treatment giant Veolia aims to constitute a "world super champion" by integrating its competitor Suez. For this, he submitted Sunday to Engie, a large shareholder of Suez, a firm offer of 2.9 billion euros, covering most of its participation.

According to its press release, 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.

"This historic opportunity will make it possible to build the French world super champion of ecological transformation", commented Antoine Frérot, CEO of Veolia.

Suez, who in October presented a strategic plan to dethrone his rival from his number one position, took "note" in a separate statement. "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 to study the operation and its impacts considered, through the prism of the interests of the company, its shareholders, its employees and all of its stakeholders, ”he added.

Engie for its part said on Sunday evening that it would "study the proposal in the coming weeks" and "will favor the most attractive solution for its shareholders, with respect for stakeholders and after taking into consideration the quality of the project. industrial ", according to its press release.

The energy giant announced in July its desire to refocus its activity, by selling assets considered non-strategic and minority stakes. "Regarding 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, "Engie's statement creates the opportunity", but "this project has the force of evidence" and goes "in the direction of history".

"We are creating the group for the world after", he assured Sunday in an exchange with the press, evoking "the need for solutions for ecological transformation" everywhere in the world.

- "Gathering forces" -

The meeting of Veolia, already world number one in the sector, and Suez, number two, was 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, marked in particular by the rise of regional groups.

The sector remains very fragmented, and the new entity would represent even less than 5% of market share at the global level, underlines Mr. Frérot.

But "the concentration has started", he warns, noting the growing interest of investment funds in the sector, or the rise of players from China.

"In a global market, size is essential to finance installations, and also finance all the solutions yet to be imagined, including breakthrough innovations such as carbon capture, or the recycling of materials not yet recyclable", argued the leader, for whom it is necessary "to gather our forces, rather than to disperse them".

If the two parties come to an agreement, the transaction must however obtain the approval of the competition authorities.

Mr. Frérot evokes "significant competition problems" especially in France, but rarely abroad and "strong complementarity".

Veolia indicates that it has already identified a purchaser for the activities of Suez Eau France, in the person of Meridiam, a French infrastructure management company, which has committed to this acquisition, for an undisclosed amount.

According to Mr. Frérot, a meeting of the two groups would have no negative impact on employment in France, including for water on the Meridiam side.

"This project is part of a friendly approach, as we share with Suez the same jobs, the same culture and the same values," he said.

The whole operation would be financed "by the usual means" according to Mr. Frérot: "our financial resources, and we would seek the market for a capital increase to be defined yet".

Regarding possible contacts with Engie, "we just responded to this indirect request (expressed in July, editor's note). We are there, no more, no less," said Mr. Frérot.

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