Suez refuses to be eaten and launches his response

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Veolia proposed to Engie to buy back its 29.9% stake in Suez for 2.9 billion euros (AFP / KENZO TRIBOUILLARDERIC PIERMONT)

Coveted by its competitor Veolia, Suez counter-attacked by announcing on Wednesday an acceleration of its development plan, which aims precisely to dethrone its old rival from its place as the world number one in water and waste.

Hurry up. Veolia, which aims to create “a super champion” of the sector, offered at the end of August to Engie to buy back its 29.9% in Suez for 2.9 billion euros, before tackling the rest of the shares. The seller believes that the account is not there, but he has until the end of September only to respond.

The management of Suez, vigorously opposed to the project, therefore embarked on a race to set up an alternative project with investor partners, and to win a bitter battle for influence.

At the end of the day, its president Philippe Varin and its managing director Bertrand Camus were to be received by Bruno Le Maire, at the request of the Minister of the Economy.

This will be the first time since the start of the showdown. The two leaders, who denounce the risks of a “fatal” takeover bid, particularly in terms of employment, should also re-explain the industrial project they have been carrying for a year, explains a source familiar with the matter.

The group announced on Wednesday that it was in negotiations with the German Schwarz, to sell it recycling activities (excluding plastics and hazardous waste) for 1.1 billion euros, as part of its development strategy announced at the end of 2019.

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Suez CEO Bertrand Camus during Euronext's annual conference in Paris, January 14, 2020 (AFP / ERIC PIERMONT)

The CEO of Suez Bertrand Camus during the annual Euronext conference in Paris, January 14, 2020 (AFP / ERIC PIERMONT)

Suez’s strategy for 2030, which involves disposals and acquisitions, aims to focus its activity on areas with high added value. The agreement thus provides for a partnership with Schwarz, owner of Lidl, to advance the circular economy.

“This project marks a major step in the achievement of our strategic plan, which plans to concentrate our forces, particularly in France and in Europe, on the activities and geographies where we can deploy our most promising innovations to be the leader in the environment “, commented Bertrand Camus, about an operation which” enhances the quality of our portfolio of activities “.

“This (Wednesday) morning’s announcement shows that we are moving forward as planned,” said CFO Julian Waldron: “showing your potential for value creation, it seems to me crucial all the time and yes, it is even more important, today, to show that we are moving forward “.

– Several white knights? –

At the same time, an array of lawyers and bankers (Goldman Sachs, Société Générale, Rothschild, JP Morgan …) surrounds the preparations for a counter-offer. In the opinion of financial analysts, finding a single white knight in this sector is not easy. But why not several.

Several names keep coming back. Thus the French investment fund Antin, which “closely” follows the situation, according to a source close to this actor specializing in water and infrastructure. “Antin has the financial means to be a major player in this issue,” said this source.

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Gathering of Suez employees in front of the group's headquarters in La Défense, September 8, 2020 (AFP / Ludovic Marin)

Gathering of Suez employees in front of the group’s headquarters in La Défense, September 8, 2020 (AFP / Ludovic Marin)

On the other hand Axa, whose name appeared in the press, is not part of the project, according to a close source.

The State, Engie’s reference shareholder, warned that it would be vigilant about employment, “the French industrial footprint”, and price.

“We view Veolia’s offer or any other offers that may come with a concern for fairness,” Le Maire said, adding that “there should not be one winner and one loser”.

The Suez unions are calling for a new day of action against this project on September 22. The social and economic committee voted on Tuesday to launch an economic alert right.

The group has 90,000 employees worldwide, including 30,000 in France. If its takeover bid is successful, Veolia plans to sell the water branch of Suez in France to the Meridiam fund, ensuring that employment would be preserved.

The case is sensitive. In Les Echos, the boss of Méridiam, Thierry Déau, assures us that the main investor in the project will be French, “certainly” CNP Assurances.

In a press release, CNP, which “has been working with Meridiam for many years”, assures in any case that it is “not involved in any discussion regarding the proposed sale of Engie’s shares in the capital of Suez” .

The main protagonists will have the opportunity to explain themselves again, publicly, on September 23, in the National Assembly in front of the deputies of the Finance Committee.

cho / tq / eb

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