Veolia Announces an Agreement to Sell Vigie’s¹ UK Waste Assets to Suez, Following Suez Exercise of Its Right of First Refusal

Rhea-AI Summary

Veolia has noted Suez S.A.'s exercise of its right of first refusal regarding Vigie's UK waste business, leading to a put option agreement where Suez will acquire 100% of Suez Recycling and Recovery UK Group Holdings Ltd. for £2 billion. This transaction reflects a valuation of 16.9 times 2021 normalized EBITDA. The total antitrust divestments reach approximately €3.4 billion, significantly reducing Veolia's debt leverage to below 3x. The completion is subject to CMA approval, and Veolia aims to maintain its leading position in the UK waste management market with revenues of €2 billion.

Positive

• Suez's acquisition of Suez Recycling and Recovery UK reflects a strong valuation at 16.9 times EBITDA.
• Total antitrust divestments of approximately €3.4 billion will lower Veolia's debt leverage below 3x.
• The disposal addresses concerns of the UK competition authority, allowing Veolia to focus on sustainable solutions in the UK market.

Negative

• None.

PARIS--(BUSINESS WIRE)-- Regulatory News:

Veolia (Paris:VIE) takes note that Suez S.A. (Suez) has exercised its right of first refusal in respect of Vigie’s UK waste business and announces a unilateral put option agreement execution between Suez and Veolia under which Suez undertakes to acquire 100% of the share capital of Suez Recycling and Recovery UK Group Holdings Ltd. for an amount of £2 billion. The cash proceeds from the transaction represent an attractive valuation of 16.9 times 2021 normalized EBITDA.

The exercise of its first refusal right by Suez follows Veolia’s announcement of its agreement to sell Vigie’s UK waste business to Macquarie made on August 8th.

The total amount of the antitrust divestments, amounting to approximately €3.4 billion, and in particular this latest transaction, will bring Veolia's debt leverage significantly below 3x.

“The progress of the merger with Suez, which began last January, continues to demonstrate the relevance and value-creation capacity of our project to create the global champion of ecological transformation in the context of a strong climate and ecological emergency. The cash proceeds from the antitrust divestments will allow us to reduce the debt leverage and will provide Veolia with additional capacity to finance growth in high value-added markets, said Estelle Brachlianoff, Chief Executive Officer of Veolia. We are satisfied that this disposal addresses the main concerns of the UK competition authority. The UK will remain an important region for Veolia where we will continue to implement sustainable and competitive ecological transformation solutions as a leading player in the local waste management market with revenues of €2 billion.”

The completion of the transaction is subject to the CMA’s approval.

Veolia group aims to be the benchmark company for ecological transformation. With nearly 179,000 employees worldwide, the Group designs and provides game-changing solutions that are both useful and practical for water, waste and energy management. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and replenish them. In 2021, the Veolia group provided 79 million inhabitants with drinking water and 61 million with sanitation, produced nearly 48 million megawatt hours and recovered 48 million tonnes of waste. Veolia Environnement (Paris Euronext: VIE) achieved consolidated revenue of 28.508 billion euros in 2021. www.veolia.com

¹ Vigie S.A., the subject to Veolia Environnement’s takeover bid, was formerly known as Suez S.A.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220922005393/en/

Group’s media relations

Laurent Obadia - Evgeniya Mazalova

Mathilde Bouchoux

presse.groupe@veolia.com

Analysts & Investors

Ronald Wasylec - Ariane de Lamaze

Tel. + 33 1 85 57 84 76 / 84 80

investor-relations@veolia.com

Source: Veolia

FAQ

What recent transaction did Veolia announce involving Suez S.A. and the UK waste business?

Veolia announced that Suez S.A. exercised its right of first refusal to acquire Suez Recycling and Recovery UK Group Holdings Ltd. for £2 billion.

How does the recent transaction affect Veolia's debt leverage?

The transaction will significantly reduce Veolia's debt leverage to below 3x.

What was the valuation multiple for the recent Suez acquisition by Veolia?

The valuation for the acquisition was 16.9 times the 2021 normalized EBITDA.

What is the anticipated revenue impact of Veolia's operations in the UK market following the transaction?

Veolia expects to maintain revenues of €2 billion in the UK waste management market.

What regulatory approval is needed for the recent transaction between Veolia and Suez?

The completion of the transaction is subject to approval from the UK Competition and Markets Authority (CMA).