[UPDATED] Veolia announces €2.4bn agreement to sell Suez’s UK waste business to Macquarie


Veolia has announced Macquarie Asset Management will irrevocably undertake to acquire 100% of the share capital of Suez Recycling and Recovery UK Group, regrouping Suez waste activities in the UK. The sale proceeds will amount to approximately €2.4 billion.

The deal remains subject to the CMA’s approval and to the right of first refusal granted by Veolia to the new Suez at the time of the combination in 2021. Following the completion of this antitrust remedy, Veolia says it will remain a major player in the UK waste management market with revenues of approximately €2 billion.

Veolia says the completion of the transaction allows it to effectively address the main concerns of the UK Competition and Markets Authority (CMA).

Following this transaction, Veolia will remain a major player in the waste sector in the United Kingdom.

The company continues that the valuation level of the sale, showing a multiple of 16.9x normalised EBITDA 2021, is significantly higher than the acquisition price resulting from the takeover bid.

Veolia says that after the disposal of the remedies agreed with the European Commission and the signature of the agreement with Macquarie Asset Management, almost all of the antitrust divestitures will have been finalised less than a year after the acquisition of Suez and on the basis of an average multiple of 15x 2021 EBITDA.

Veolia says all of these disposals, amounting to €3.4 billion, will bring the Group’s debt leverage below 3x and the additional investment will give it the capacity to finance growth in high-value-added markets.

Chief Executive Officer of Veolia, Estelle Brachlianoff, said: “We are very satisfied with this transaction, which is being carried out under excellent conditions that once again demonstrate the attractiveness of the environmental services business and the relevance of our proposal for remedies to the CMA.

“Following 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.”

Chief Executive Officer for SUEZ recycling and recovery UK, John Scanlon, said: “We are very pleased that Veolia has agreed a deal in principle with Macquarie Group Ltd (Macquarie) for the sale of SUEZ recycling and recovery UK.

“It has clearly been an unsettling time since this stage in our journey began back in August 2020 and as it draws to an end, almost two years on, it brings greater clarity over our future direction, with hopefully a new owner in place before the end of the year.

“This will allow us to continue to focus as a company on providing essential waste and recycling services for our customers, whilst delivering our commitment to People and Planet, and moving towards our vision of ‘living in a world where there is no more waste.”

UPDATE: 11 August 2022

Suez said in a statement that it has took “due note” of the agreement between Veolia and Macquarie in relation to the acquisition of the former Suez recycling and recovery (R&R) assets in the UK.

“This agreement is subject to SUEZ’ right of first refusal,” it said, “in addition to the regulatory approvals to be obtained from the competition authorities.

“Suez confirms its interest in the potential acquisition of its former R&R assets in the UK. Suez will assess in details the terms of the agreement with Macquarie, at the end of which it will decide to exercise or not its right of first refusal.

“Upon receipt of the notification by Veolia, Suez will have the right within a 30 business days period to acquire those assets from Veolia with terms and conditions equivalent to the ones proposed by Macquarie.”

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