Veolia is selling its waste disposal business in the UK to comply with that country’s antitrust obligations. The French utility company has confirmed it will sell Suez’s waste business in the UK to Macquarie Asset Management for around 2.4 billion euros, a deal intended to address concerns from the UK Competition Authority. A unilateral purchase agreement by which Macquarie Asset Management “irrevocably undertakes to acquire 100% of the capital of Suez Recycling and Recovery UK Group Holdings, bringing together Suez’s waste activities in the United Kingdom”, indicates the group’s note.
Veolia will remain a major player in the UK waste sector
Thanks to this transaction, Veolia will remain a major player in the waste sector in the United Kingdom and, more broadly, in the environmental services market in the region “which remains strategic for the group”, declared Estelle Brachlianoff, CEO of Veolia. . Veolia had already announced its intention to sell the waste activity of its former rival Suez in the United Kingdom, after the British competition authority (CMA) raised objections to the Veolia/Suez merger.
Britain still needs industrial water divestment
Estelle Brachlianoff said she was “very confident” that she would have received all regulatory clearances for the deal, which is expected to be finalized by the end of the year, and added that a small sale of assets in the industrial water sector were always needed in Great Britain. “Virtually all of the divestments required by the antitrust authority will have been finalized less than a year after the Suez acquisition,” the company said. The disposals, for a total amount of 3.4 billion euros, will also lead to a significant reduction in Veolia’s debt, which fell from 13.8 billion euros a year earlier to 22.4 billion. euros at the end of June.
And the title on the Paris stock exchange is celebrating with +2% to €24.48. “This sale completes antitrust divestments that have been completed in less than a year at excellent multiples,” note analysts at JPMorgan Chase &; Co. “This should give Veolia the balance sheet flexibility it needs to resume its external growth.” The French company is also investing more in high-growth sectors such as the treatment of hazardous waste and the recycling of plastics.
Union with Suez difficult
In December last year, Veolia and Suez won EU antitrust approval for their €13 billion merger, after a months-long dispute that also involved legal action and plans to Suez to separate its French water activities from Veolia, a hypothesis later abandoned after the two companies reached an agreement, which closed on January 7, with Veolia controlling 86% of Suez. ()
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