Veolia to buy Suez to create a group to lead the energy transformation

Veolia is leading the first major movement in Europe in the energy and public services sector in response to the major transformation of the energy model that has already begun. And the purchase of Suez, which has always been its objective, is now beginning to become a reality. It has announced that it will acquire 29.9% of the capital from Engie, the majority shareholder in Suez. The next step will be to launch a takeover bid, which will be subject to obtaining the green light from the antitrust authorities, for the securities held by the other shareholders. Altogether an operation worth 10 billion.

This offer moves the foundations of the electricity companies and all the utilities (public services) in Europe. They have always been important players on the energy scene: Veolia is the result of other transactions as it was spun off from the Vivendi consortium. Meanwhile, Suez took control of Compagnie General des Eaux.

Now the State also has a relevant role in the process. It has 24% of Engie's capital, but 34% of the voting rights, so it is directly aware of Veolia's plans, in a takeover bid that for the moment is not considered hostile, but neither is it friendly. This summer Veolia's chairman, Jean-Pierre Clamadieu, said they were ready to leave Suez. He will now study the offer and the company has indicated that it will opt for the solution that is most positive for its shareholders.

Meanwhile, Veolia's chief executive, Antoine Frérot, said that the aim of taking over Suez is "to invest in innovation and infrastructure projects that the authorities are demanding throughout the world". The group that will be created if it goes ahead will have a turnover of Euro 45 billion and a market capitalisation of Euro 20 billion (similar to Endesa). However, it will be forced to divest and leave assets in the market.

The Minister of Economy and Finance, Bruno Le Maire, said: "The State, as Engie's main shareholder, will study this offer and determine its position based on Engie's asset interests and the quality of the industrial project". The priority would be to maintain employment and the plurality of operators in the services to local authorities.