Regulatory News:
Veolia (Paris:VIE) acknowledges Engie’s decision to respond
favorably to its offer to acquire a 29.9% stake in Suez.
As a reminder, this proposal, submitted on August 30 and
continuously improved since, presents in particular the following
elements:
- a price of 18 euros per share (dividend included), i.e. a
premium of 75% over the unaffected price of July 30, 2020, paid
immediately in cash and paving the way for a public tender offer on
the remaining share capital of Suez for all of its
shareholders;
- the guarantee of 100% of jobs and social benefits for all Suez
employees in France;
- the certainty of a French operation;
- the preservation of competition thanks to the takeover by
French company Meridiam of the Water activity in France from Suez,
Meridiam having committed to preserving all jobs and social
benefits, to take over the R&D center of Suez and to double the
investments planned and to inject 800 million euros into this new
scope within 5 to 7 years.
This decision marks a first decisive step in the construction in
France of a world super champion of the ecological transformation
making the trail in this strategic sector for at least 20
years.
Antoine Frérot said: "I am very happy to lay the
foundation stone in France today for a world super champion of the
ecological transformation. This is a wonderful opportunity for the
employees, customers and shareholders of both groups, and it is a
project which serves France and the planet ".
In accordance with the commitments made, Veolia confirms its
intention to file a voluntary public takeover bid on the remaining
Suez share capital in order to complete the merger of the two
companies. This offer will be at the same price as that paid to
Engie, i.e. 18 euros per share, under the conditions detailed
below. At the same time, Veolia recalls that this offer will not be
launched without first having obtained a favorable opinion from the
board of directors of Suez, with which Veolia wishes to resume
discussions as of tomorrow.
The details of Veolia's intentions are shown below.
Messier Maris & Associés, and Perella Weinberg Partners are
acting as financial advisors to Veolia for this transaction, Cleary
Gottlieb Steen & Hamilton LL.P., Professor Xavier Boucobza, Me.
Patrice Gassenbach, Peltier Juvigny Marpeau & Associés and
Hogan Lovells, Flichy Grangé Avocats as legal advice. Citi and Gide
are the financial and legal advisers of the board of directors.
...
Veolia has today acquired Suez shares representing 29.9% of
the capital of Suez from Engie, at a price of 18 euros per share
(dividend included)1.
Intention to file a public offer
Veolia intends, following the acquisition of the 29.9% block of
Suez shares, to take control of Suez. To this end, Veolia intends
to file a voluntary takeover bid for the remaining Suez shares.
This public offer will be in cash, without cap, Veolia reserving
the possibility of adding to the part offered in cash a capped part
in Veolia shares.
The filing of this public offer will take place at the latest
when the necessary regulatory authorizations are obtained, in
particular in competition matters, within 12 to 18 months, Veolia
reserving the right to file the public offer at any time before
obtaining these authorizations.
However, Veolia’s public offering will only take place once the
Veolia project has been favorably received by Suez’s board of
directors, possibly after the general meeting of its
shareholders.
The price of the public offer will be that paid to ENGIE, i.e.
18 euros per share (coupon attached). This price will be adjusted
to take into account any distribution in any form whatsoever (in
cash or in kind), including (i) any distribution of a dividend, an
interim dividend, reserves or premiums made by Suez or (ii) any
amortization or reduction by Suez of its share capital, or any
acquisition or repurchase of its own shares by Suez, for a price
per share higher than the offer price. Likewise, in the event of an
operation having an impact on Suez's capital (in particular,
merger, demerger, division or consolidation of shares, distribution
of free shares in respect of existing shares by incorporation of
reserves or profits), the price offered per share (and, in the case
of a subsidiary part offered in Veolia shares, the exchange ratio)
will be automatically adjusted in order to take into account the
impact of said transactions.
In addition, Veolia reserves the right, where applicable, to
modify the price of 18 euros per share (coupon attached) in the
event of significant events that have affected or are likely to
affect Suez's balance sheet, income or outlook between the date of
acquisition of the block from ENGIE and the date of filing of the
tender offer. These significant events include asset disposals or
acquisitions, the granting of rights to third parties over Suez
assets, and commitments made outside the normal course of business.
Any price change that could result from such events would be such
as to reflect Suez's impairment as determined by a multi-criteria
analysis.
Veolia also reserves the right not to file a public tender offer
in the event of major adverse circumstances impacting the Suez
group or of a sale by Suez of any strategic asset, namely the
Spanish and Chilean water assets, WTS, regulated water assets in
the United States of America, waste management assets in France,
the UK and Australia or any other measure significantly affecting
these assets.
Employee commitments
Veolia formally confirmed its employee commitments, which were
handed over to Engie and the French Minister of the Economy,
Finance and Recovery.
Veolia has made a commitment that the merger operation will not
have a negative impact on employment in France.
Regarding the activities in France that will have to be sold to
enable us to obtain regulatory authorizations, Veolia undertakes
that the chosen buyers will make the same employee commitments.
On bringing together the management teams to form the new group,
Veolia is committed to integrating Suez executives into the
management bodies in a spirit of balance and on the basis of
competence criteria.
Authorizations relating to merger control
As reported on August 30, 2020, Veolia has identified the
targeted competition issues that the merger with Suez would involve
and has anticipated remedies.
Notifications will be required in a number of jurisdictions,
including the European Union, United States of America, United
Kingdom, Australia, China, Morocco. Pending authorization from the
European Commission, Veolia will not exercise the voting rights
attached to its stake, except for decisions likely to protect the
property value of this stake with the authorization of the
Commission.
In the context of the remedies identified, Veolia proposed
Meridiam as a buyer capable of preserving competition and
employment for the activities of Suez Eau France. Meridiam has
formally committed to this acquisition by submitting an offer to
Veolia, for the benefit of Suez, relating to the management and
operation of drinking water and sanitation services carried out in
France as well as the R&D activities. related to water and
those of the design / construction of water treatment facilities in
France (Degrémont France). Meridiam's offer, which is at a market
price (the price of 18 euros per Suez share offered by Veolia
taking this into account), covers the scope comprising the entire
capital of the company Suez Eau France and its subsidiaries, and
the design-build activities in France corresponding to Degrémont
France, for those not owned by Suez Eau France.
The only conditions for this acquisition would be obtaining the
required authorizations for merger control and the settlement and
delivery of Veolia's public tender offer for Suez. Meridiam's offer
is valid until December 31, 2022.
Funding
The acquisition of the 29.9% block is financed from the group's
own resources. The financing of the offer would be provided by a
bridge loan concluded with a banking syndicate. It is expected that
this loan will be refinanced in part by the proceeds from the sale
of the remedial assets and, possibly, by the issue of equity
securities or giving access to the capital (depending in particular
on the amount of the disposals and a possible part offered in
Veolia shares in the public offering) with a view to preserving the
current credit rating and maintaining the extended group's net
financial debt / EBITDA ratio below 3.0x in the medium term in
accordance with the group's objectives.
...
Disclaimer
Veolia Environnement is a corporation listed on the Euronext
Paris. This document contains "forward-looking statements" within
the meaning of the provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are
not guarantees of future performance. Actual results may differ
materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are outside the
control of Veolia Environnement.
Veolia group is the global leader in optimized resource
management. With nearly 179,000 employees worldwide, the Group
designs and provides water, waste and energy management solutions
which contribute to the sustainable development of communities and
industries. Through its three complementary business activities,
Veolia helps to develop access to resources, preserve available
resources, and to replenish them.
In 2019, the Veolia group supplied 98 million people with
drinking water and 67 million people with wastewater service,
produced nearly 45 million megawatt hours of energy and treated 50
million metric tons of waste. Veolia Environnement (listed on Paris
Euronext: VIE) recorded consolidated revenue of €27.189 billion in
2019 (USD 29.9 billion). www.veolia.com
1To protect Engie, the share transfer contract entered into with
Engie includes a price supplement clause in the event that the
market benefits from an overbid from Veolia, thus allowing Engie to
benefit from all or part of this overbidding.
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version on businesswire.com: https://www.businesswire.com/news/home/20201005005943/en/
Veolia Group Media Relations Laurent Obadia - Sandrine
Guendoul Tel.+ 33 6 25 09 14 25 sandrine.guendoul@veolia.com
Analysts & Investors Ronald Wasylec - Ariane de
Lamaze Tel. + 33 1 85 57 84 76 / 84 80
investor-relations@veolia.com
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