Veolia and Suez announced that their respective boards of directors reached an agreement in principle on the key terms and conditions of a merger between the two groups.
The two groups have agreed on a price of €20.50 per Suez share subject to the signature of a Combination Agreement. Subject to obtaining a fairness opinion in accordance with applicable regulations, this offer would be recommended by the board of directors of Suez upon signature of the definitive agreements.
The agreement would allow:
•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.
•The implementation of Veolia’s plan to create a global champion of ecological transformation, with revenues of around €37 billion, through the Suez takeover bid, in which all the strategic assets identified by Veolia will remain.
•The reiteration of Veolia’s social commitments for a period of four years after the closing of the offer.
•With a view to the integration and mix of teams, commitments to be made by Veolia regarding the composition of the management teams at headquarters and in the countries.
The two groups propose that the new Suez resulting from this agreement should be owned by a group of shareholders including financial partners from both groups and by employees. The majority of the shareholders of the new Suez will be French.
In order to guarantee the conditions for the long-term development of the new Suez:
•Its shareholders will have to subscribe to the social commitments for four years from the closing of the takeover bid;
•Its shareholders will have to undertake to maintain their positions over the long term.
Its scope will be the municipal water and solid waste activities of Suez in France (including CIRSEE, the main research center in France), as well as the activities of Suez in particular in water and in the following geographies : Italy (including the stake in Acea), the Czech Republic, Africa (including Lydec), Central Asia, India, China, Australia, and the global digital and environmental activities (SES).
This agreement in principle also provides for:
•The termination of the agreements with Cleanaway in accordance with their terms concerning the disposal of the assets in Australia (subject to the Sydney assets) and the suspension of any other significant disposal, which allows Veolia to acquire in particular all the assets designated as strategic in its draft offer document filed on February 8 with the Autorité des marchés financiers.
•The deactivation of the Dutch foundation in relation with the Suez announcements.
•The suspension of ongoing legal proceedings and, upon signature of the final agreements, the withdrawal of Suez and Veolia from all ongoing litigation and the absence of any new proceedings between them.
•The full cooperation of Suez, Veolia and the shareholders of the new Suez in obtaining all necessary authorizations (competition, foreign investments, etc.) as quickly as possible and under the best possible conditions.
The two groups have agreed to enter into definitive merger agreements by May 14.
Published in the May 2021 Edition
