Veolia has announced that it has made a firm offer to Engie for the acquisition of 29.9% of the Suez shares it holds. This offer follows Engie’s announcement on July 31, 2020 of the launch of a strategic review including its stake in Suez. This offer at a price of €15.50 per Suez share, which can be implemented immediately, is valid until September 30, 2020. The proposed price of Euro 15.50 per share represents a premium of 50% over the closing price of Suez on July 30, unaffected by the announcement of Engie’s intentions.
This offer, unanimously approved by Veolia’s Board, would be paid in cash. If it is accepted by Engie, Veolia intends, following the acquisition of the 29.9% of Suez shares, to file a voluntary tender offer for the remaining Suez shares. The filing of this voluntary tender offer will be completed as soon as the necessary regulatory authorizations, in particular with respect to competition, have been obtained within 12 to 18 months. Veolia reserves the right to file the public offer at any time before obtaining these authorizations. In accordance with stock exchange regulations, the characteristics of the public offer and in particular its price will be determined at the time of its filing. The price will take into account the price paid to Engie for its 29.9% block of shares, which is an important reference, and, as the case may be, any subsequent significant events affecting Suez. Veolia’s proposal to Engie includes a commitment by Engie to contribute its remaining 1.8% stake in Suez to the public offer.
The entire transaction would be accretive from the first year. Group debt would remain under control, enabling Veolia to maintain its Investment Grade profile.
Antoine Frérot, Chairman and CEO of Veolia said: “The environmental urgency is stronger than ever, given the state of natural resources and climate change. The growing pressure of public opinion, the European Green Deal and the stimulus packages that are being announced in many countries make ecological ambition a necessity. This project will enable us to complement the solutions we provide to public and private actors in order to give them the means to sustainably reduce their environmental impact. This historic opportunity will enable us to build the French world champion in ecological transformation, while accelerating international development and strengthening the new entity’s capacity for innovation. This project is part of a friendly approach, as we share the same businesses, corporate culture and values with Suez.”
Prior to this transaction, Veolia has already identified the limited antitrust issues that such a transaction would entail, and has anticipated remedies. In this context, Veolia has identified an acquirer for Suez’s French water activities, Meridiam, a French infrastructure management company, capable of preserving competition and employment. Meridiam has made a formal commitment to this acquisition.
All of Suez’s French water activities, as well as the engineering and R&D teams related to this division, would be acquired by this long-term French buyer. Meridiam, a benefit corporation, is a world leader in investment and infrastructure management for public services that would provide Suez Eau France with access to the financial resources it needs to realize its growth potential and industrial ambition.
In addition, the other identified areas of competition would concern certain waste management activities in France and a very few cases outside France.