Veolia has agreed in principle to acquire Suez in a merger deal worth roughly €13 billion after months of bitter fighting between the two French waste and water management giants.
Veolia agreed to pay €20.50 a share for the roughly 70% of Suez it doesn’t already own, ending a long takeover battle.
Suez had rejected Veolia’s advances since the rival bought a big stake in the firm last year.
The companies said the merger of the world’s two largest waste and water groups would create a “global champion of ecological transformation” with revenues of around €37 billion.
The companies also said however the agreement allows for the creation of “a new Suez” made up of assets “forming a coherent and sustainable group from an industrial and social standpoint, with real growth potential, with revenues of around €7 billion.”
Bloomberg reported that as part of the deal, French investment funds Meridiam and Ardian SAS — along with France’s Caisse des Depots et Consignations and US private equity firm Global Infrastructure Partners — will be allowed to buy Suez assets with €6.9 billion euros in revenue.
Veolia said the scope of the “new Suez” will be the municipal water and solid waste activities of Suez in France, as well as the activities of Suez “in particular in water and in the following geographies” of Italy, the Czech Republic, Africa, Central Asia, India, China, Australia, and in global digital and environmental activities.
The two groups have agreed to enter into definitive merger agreements by May 14.
Suez Chairman Philippe Varin said: “We have been calling for a negotiated solution for many weeks and today we have reached an agreement in principle that recognizes the value of Suez.
“We will be vigilant to ensure that the conditions are met to reach a final agreement that will put an end to the conflict between our two companies and offer development prospects.”
Veolia CEO Antoine Frérot said: “I am particularly pleased to announce today the conclusion of an agreement between Suez and Veolia that will enable the construction of the world champion of ecological transformation around Veolia, offering France a reference player in a sector that is probably the most important of this century.
“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.”
Suez CEO Bertrand Camus said: “This agreement in principle gives us every chance of obtaining a global solution that would offer the essential social guarantees for all employees and prospects.”