Paris (AFP)
After eight months of battle, Veolia and Suez have buried the hatchet: the two French flagships of water and waste announced on Monday an agreement in principle so that the former partly absorbs its rival in order to give birth to a " world champion of ecological transition ", an operation hailed by the French government.
Veolia will buy a large part of Suez's international operations for a total turnover of 37 billion euros.
The future Suez, focused on France, will be taken over by majority French shareholders and will be less than half the size of the current group, ie around 7 billion in turnover out of the current 17 billion.
"All the stakeholders of the two groups come out (...) winners. The time for confrontation is over, the time for reconciliation has begun", rejoiced the CEO of Veolia, Antoine Frérot, quoted in a joint press release with Suez.
"We had called for a negotiated solution for many weeks and today we have found an agreement in principle which recognizes the value of Suez", underlined the latter's president, Philippe Varin.
From a broad initial disagreement, the two companies have reached a series of compromises and hope to reach final deals by May 14.
Veolia notably agreed to raise its offer to 20.50 euros per Suez share - it initially proposed 18 euros, an amount deemed insufficient by its rival who demanded 22.50 euros per share.
The price finally adopted values the whole of Suez at around 13 billion euros.
At the same time, the "new Suez" will integrate the current activities of Suez in municipal water and solid waste in France, as well as other activities of the company "in particular in water" and in several geographical areas including Italy, Africa, India, China and Australia.
According to a source familiar with the matter, the Meridiam fund as well as the duo made up of the Ardian and GIP funds, which respectively supported the initiatives of Veolia and Suez, will each hold 40%.
The balance should be in the hands of the Caisse des Dépôts and Employees.
Meridiam had already announced that it was ready to also bring its waste treatment activities to Europe, ie the equivalent of one million tonnes.
- The Stock Exchange applauds -
On the Paris Bourse, the signing of this armistice was greeted: at 1:00 p.m. (11:00 GMT), in a sluggish market, Veolia shares jumped by nearly 9% and that of Suez by practically 8%.
The latter, listed at 19.84 euros, thus approached the price offered in the context of the offer.
On the trade union side, the CGT secretary of the Suez European works council, Franck Reinhold von Essen, expressed Monday to AFP a "real feeling of betrayal", believing that "the means to negotiate something else existed".
For his part, Hervé Déroubaix, secretary general of the National Union of Water and Sanitation Personnel, said to wait to see the conditions under which Suez employees would move into the new group "so that they are not not losers and that there is a real social and strategic project ".
The agreement provides for four years of maintaining employment and social gains in the new Suez.
Multiplication of legal remedies, insults through the press, pressure strikes and warning signs ... The two French groups have been clashing since last August, and in particular since the acquisition by Veolia in October of 29.9% of Suez from from Engie.
Veolia then launched a hostile takeover bid for the rest of the Suez shares.
At the same time, everyone regularly showed their willingness to reach out to their rival, but on their own terms, giving the impression of a dialogue of the deaf.
The affair had also taken a political turn, the Minister of the Economy Bruno Le Maire intervening on several occasions to plead in favor of a negotiated solution.
Monday, he praised a "amicable agreement" which "preserves employment".
In the absence of convincing progress in the discussions, a meeting was held last Thursday in Bercy in the presence in particular of the minister and Eric Lombard, the boss of the Caisse des Dépôts (CDC), explained Monday to the AFP a source close to the case.
At its end, it had been decided that if the two groups did not arrive at a negotiated solution, the CDC would not remain a shareholder of Veolia of which it held 6.5% at the end of 2020, added this source, increasing the pressure to reach a compromise.
© 2021 AFP