Group

SUEZ offers a negotiated solution to Veolia supported by a binding offer from Ardian - GIP

The SUEZ Board of Directors, in keeping with its core values and its commitment to safeguarding the Group’s social interests, wishes to swiftly find a negotiated solution with Veolia that takes its expectations into account. These expectations focus on providing fair value to shareholders, ensuring social guarantees for employees, and honoring the Group’s commitments to its customers.

The expectations of the Board of Directors are based on the conviction that the SUEZ Group intends to remain a key player in the ecological transition, at a time when these issues are increasingly important in France and around the world. With this in mind, the SUEZ Board of Directors is ready to enter into negotiations as of today to break the current deadlock, and hopes that Veolia will respond favorably to this constructive proposal.

On March 20, the consortium submitted a firm and binding offer to the SUEZ Board of Directors for the creation of a new entity, the outlines of which are close to those proposed during mediation by the French State. The proposal made by the Ardian-GIP consortium has been unanimously approved by the SUEZ Board of Directors, which finds it consistent with the expectations expressed in its press release of February 26, respectful of the Group’s stakeholders, its shareholders, its customers, and its employees, and supportive of Veolia’s aims by enabling it to substantially strengthen its activities.

The offer provides for the acquisition by the Consortium of several activities including all the French “Water” and “Recycling and Recovery” (R&R) activities, as well as several “Water and Technology” activities at the international level. On this basis a negotiation can start and it must aim to ensure a healthy level of competition for customers, and, for SUEZ employees, a plan for the future and for their professional development. This combination will enable the Group to maintain its technological leadership through high levels of investment in Research and Development.

The cash consideration proposed for of all the relevant activities amounts to an enterprise value of €15.8 billion, equivalent to a value of €20 per share.

This solution takes into account the interests of all stakeholders:

  • Employees in France will see the continuation of SUEZ’s activities in France and the maintenance of their social benefits and their jobs for at least 4 years All the employees of the new combined entity will be offered a significantly increased stake in the employee shareholding of the new entity
  • clients and consumers will benefit from continued competition on the French market
  • shareholders will receive a higher price per share, and will receive it more quickly and with a greater certainty, particularly in light of the acceleration of the antitrust proceedings made possible by such solution
  • Veolia will be strengthened


The SUEZ Board of Directors of SUEZ is proposing entering into negotiations on this basis, with the aim of finalizing them as soon as possible and no later than April 20. The SUEZ Board of Directors is prepared to recommend an agreement that (i) incorporates a solution based on that contemplated with the Consortium, as described above, (ii) would enable Veolia to confirm its 4-year corporate commitments and (iii) would increase Veolia’s offer price to a minimum of €20 per share (cum dividend).

Philippe Varin, Chairman of SUEZ, has stated:

If, contrary to SUEZ’s wishes, a negotiated solution has not been found by April 20, 2021 at the latest, the Board will accelerate the implementation of the SUEZ 2030 strategic plan in order to create value for all stakeholders well in excess of Veolia’s current offer. The Board will continue to explore all available options to show the value potential of each of its core businesses: “Recycling and Recovery” and “Water and Technologies”. This will result in enhanced opportunities for all SUEZ employees.

Under these circumstances, the SUEZ Board of Directors, which has a duty to protect the corporate interests of the Group and to find a balance that benefits all stakeholders, has taken the decision to make the safeguarding mechanism for retaining the “Water France” activity within the Group irreversible until September 2024, in order to protect the interests of the stakeholders. At the same time, the scope of this safeguarding mechanism has been amended to provide for its dissolution in either of the two following cases: (i) if an agreement on the main principles of a transaction comprising a potential tender offer for SUEZ’s shares is reached no later than April 20, 2021, or (ii) automatically, if a public cash tender offer equal to at least €22.5 per share is the subject matter of a public commitment of an offeror no later than May 5, 2021, with or without the recommendation of the SUEZ Board of Directors1.

In the event that Veolia withdraws its offer within six months, the Consortium could consider the filing of a tender offer on the whole share capital of SUEZ. The implicit consideration of this offer, calculated on the basis of the valuation of all the activities included in the Consortium’s offer, would be equal to €20 per share (cum dividend), subject to the support of the SUEZ Board of Directors, the Intersyndicale, and the public authorities; the completion of due diligence on the rest of the Group; and the Consortium’s capacity to finance such an offer.

Details regarding the elements set out above are provided in the additional information addendum attached to this press release.

1 The detailed conditions governing the dissolution of the safeguarding mechanism are included in the additional information addendum attached to this press release.

Contacts

Press: Isabelle Herrier Naufle
isabelle.herrier.naufle@suez.com +33 1 58 81 55 62
Analysts & Investors: Cécile Combeau - Baptiste Fournier - Julien Minot
+33 1 58 81 24 05