Brussels gives the green light to the takeover of Suez by Veolia

This decision by the European Commission, which monitors competition in the EU, paves the way for the conclusion of a Veolia takeover bid for Suez in the coming weeks. Brussels authorized on Tuesday the merger of the two French water and waste giants Veolia and Suez , an operation at 13 billion euros sealed in the spring after months of battle between the two historic rivals.

This decision by the European Commission, which monitors competition in the EU, paves the way for the conclusion of a takeover bid by Veolia for Suez in the coming weeks. To obtain this green light, Veolia, world number one in its businesses, had to commit to selling most of Suez’s activities in France.

In detail, the group will notably have to sell “almost all” of Suez’s activities in waste management and municipal water in France, “almost all” of Veolia’s activities in mobile water services in the Economic Area European, “the vast majority” of Veolia’s activities in industrial water management in France and “part” of the activities of the two companies in the treatment of hazardous waste, the European executive said in a press release.

“World champion of ecological transformation”

The green light “is subject to full respect” of these commitments which “completely eliminate the competition concerns identified”, underlined the Commission.

The transaction, which was notified to Brussels on 22 October, aims to make Veolia “a world champion of ecological transformation”, strengthened in its capacity for innovation in the face of Chinese competition.

Veolia will therefore absorb a large part of Suez’s activities internationally: United States, Latin America, Spain, Australia, United Kingdom. It will see its workforce increase from 150. at 230.000 employees and its turnover from 26 to 37 billion euros.

Outside the scope of the merger, the new Suez group, reduced to 40% of the current group and refocused mainly on water and on France, will count approximately 37. 000 employees for nearly 7 billion euros in turnover. Held by a consortium made up of the French Meridiam and American funds GIP alongside the Caisse des Dépôts / CNP Assurances, it will be withdrawn from the Stock Exchange.

End of a battle

Veolia, which currently holds 26, 9% of the capital of Suez (acquired in October 2020 from the French energy company Engie), had launched at the end of July a takeover bid on 70, 1% remaining.

Suez fought for a long time to avoid this initially hostile takeover. But, after eight months of a financial, political, judicial and media standoff between the two rival groups for 150, he had finally accepted the repurchase in April, following mediation.

The acquisition price was notably raised to 20, 50 euros per share, valuing the target at some 13 billion euros.

With fire v ert of Brussels, Veolia has already obtained the approval of 13 on the 18 entries in the file. The group is still awaiting authorization from the authorities of the United Kingdom, Chile and Australia, but only the decision of the European Commission was likely to block the takeover.