Veolia has submitted its latest merger proposal to Suez, which could see Veolia only take over water and waste management activities outside of France.
In a press release yesterday (12 March) Veolia set out five points of the proposal which it claimed would accelerate the “inevitable merger between the two groups”.
Veolia outlined how Suez could continue to operate under its current conditions in France
However, hours later, Suez hit back and said the proposal was “unacceptable”, as it failed to value Suez at a “fair price”, offer its employees social guarantees or ensure customers will have their long-term commitments honoured.
Proposal
In its proposal, Veolia said that investment fund Meridiam —which it says has never sold any assets — has confirmed its interest in taking over Suez’s French operations.
Veolia said this would allow the company to “naturally continue to operate under the Suez brand”. It added that Meridiam is “ready to double its investments over the next five years and to hold the company for at least 25 years”.
France
Veolia says this solution would allow “Suez employees in France to continue to work within the same group”.
It added that employees in France would remain employed by Suez under this solution.
Competition
Veolia added that this approach would make Suez an “even stronger competitor to Veolia in France”, anchored in the long term and benefiting from doubled investment resources.
“For shareholders, no valuation at a fair price is proposed”
The clients, particularly local authorities, would thus find in the new Suez a “strengthened and stabilised partner enabling them to achieve their own ecological transformation objectives”, Veolia added.
Value
Suez however issued a statement shortly after Veolia’s proposal. It said that there has been no “serious step forward for Suez’s stakeholders”.
The company said its board of directors will study the proposals “even if, at this point, the proposal of Veolia lacks seriousness”.
The statement went on say the proposal will threaten the sustainability of the French activities, as they will be “cut off from growth and innovation of international developments”.
It added that the proposed “20 years” guarantee would not “guarantee customers the competition of an international leader nor the credibility of solutions developed for a global market and meeting the challenges of the ecological transition”.
It added that the unchanged valuation also remains “unacceptable” and said the conditions of the transaction with Meridiam remain “opaque”.
Outside France
The move as proposed would see Veolia take over all of Suez’s water and waste management businesses outside of France, subject to any potential competition law hurdles.
Suez has its headquarters in Paris (picture: Shutterstock)
This comes after Veolia issued a warning statement to Suez on Sunday, 7 March, following reports that Suez was planning to sell parts of its UK and Australian businesses (see letsrecycle.com story ).
Battle
The two firms have been in a war of words since August 2020 when Veolia first announced its intention to buy Suez (see letsrecycle.com story).
Following Veolia’s acquisition of a 29.9% stake in Suez from Engie on 5 October, the former company announced its intention to make a voluntary public takeover bid for the balance of Suez’s shares (see letsrecycle.com story).
This valued the whole of Suez at €11.2 billion ( £9.58 billion using today’s currency).
The post Veolia offers solution for ‘inevitable’ Suez merger appeared first on letsrecycle.com.
Source: letsrecycle.com Waste Managment
