Cleanaway’s proposed $2.52 billion acquisition of Suez’s Australian assets has been scrapped, as French waste management giants Suez and Veolia agree to merge.
Veolia and Suez’s respective boards of directors announced an agreement in principle on the key terms and conditions of the merger yesterday, after Veolia lifted its offer price to €20.50 per Suez share.
Veolia announced its plans to take over Suez in October last year when it acquired a 29.9 per cent stake in the company.
According to Veolia CEO Antoine Frérot, the agreement will enable the construction of ecological transformation, while offering France a reference player in a sector that is “probably the most important of this century.”
“This agreement is beneficial for everyone: it guarantees the long-term future of Suez in France in a way that preserves competition, and it guarantees jobs,” he said.
“All stakeholders in both groups are therefore winners. The time for confrontation is over, the time for combination has begun.”
The Board announcement notes the termination of 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.
This will allow Veolia to acquire all assets designated as strategic in its draft offer document, filed 8 February with the Autorité des marchés financiers.
The Sydney assets refers to an agreement made by Cleanaway and Suez Australia that should the global takeover eventuate, Cleanaway will acquire a portfolio of Suez’s post collections assets in Sydney.
The assets comprise two landfills and five transfer stations and will be acquired for $501 million, subject to various conditions.
The agreement will also allow the implementation of Veolia’s plan to create a global champion of ecological transformation through the Suez takeover bid, in which all the strategic assets identified by Veolia will remain.
Additionally, the agreement provides for 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.
Suez Chairman of the Board Philippe Varin said that after weeks of negotiations, the two companies had reached an agreement that recognises the value of Suez.
“We will be vigilant to ensure that the conditions are met to reach a final agreement that will put an end to the conflict between our two companies and offer development prospects,” he said.
Suez CEO Bertrand Camus added that the agreement gives every opportunity to obtain a global solution which will offer essential social guarantees for all employees and prospects.
“I would like to thank all the SUEZ teams for their tremendous mobilisation in the implementation of the SUEZ 2030 strategic plan, of which everyone can be proud,” he said.
“I know that I can count on them to stay focused in the coming months to ensure the best quality of service to our customers.”
The two groups have agreed to enter into definitive merger agreements by May 14.
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