Suez and Veolia, the two warring French waste and other industrial groups, have kissed and made up, a rapprochement that has killed off Cleanaway’s $A2.5 billion deal to buy Suez’s waste assets in Australia.
Suez said in Paris last night (Monday)said that it has reached an agreement in principle on a $US15.4 billion euro merger with Veolia Environnement SA, ending months of acrimony and legal battles.
The French waste and water management company said the two companies agreed to enter into definitive merger agreements by May 14 on a price of 20.50 euros ($US24.40) per Suez share.
Under the deal, the companies will withdraw all legal proceedings and terminate agreements for disposals, such as a recent deal for Suez to sell its recycling-and-recovery business in Australia to Cleanaway Waste Management Ltd.
“This agreement is beneficial for everyone: it guarantees the long-term future of Suez in France in a way that preserves competition, and it guarantees jobs. All stakeholders in both groups are therefore winners. The time for confrontation is over, the time for combination has begun,” Veolia Chief Executive Antoine Frerot said in the statement.
Reuters reported that as part of the agreement, and in part to ease antitrust problems, some of Suez’s assets will be spun off into a new entity with around 7 billion euros in revenue.
Investment funds Meridiam, Ardian and Global Infrastructure Partners as well as state-backed Caisse des Depots and employees will be shareholders in the “new Suez”.
Shares for both companies jumped in early morning trading, with Suez up 6.8% and Veolia up 6.2% in early trading on the Paris Exchange.
