Veolia’s acquisition of Suez took a step closer this week (28 July) after it received the blessing of the French stock exchange, while both companies posted “strong” results for the first half of 2021.
And, Antoine Frérot, Veolia’s chairman and CEO, gave further updates on how the purchase could impact the UK market.
The companies’ positive results are said to have been driven in part by high prices for recycled materials and higher waste volumes in Europe.
Between January and June 2021, Veolia’s revenue rose to €13.6 billion, up 11% and 5% respectively when compared to the same period in 2020 and 2019.
Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew to €2.1 billion, up 31% from 2020 and 6% from 2019.
In the UK, overall revenues were up 16.8% compared with the same period last year.
Antoine Frérot said: “Veolia achieved record results in the first half of 2021. All our operational and financial indicators have registered outstanding growth, both compared to 2020 and to 2019.
“Just as Veolia is about to acquire Suez, the group has never been in better shape.”
Commenting specifically on the UK aspect of the deal, Mr Frérot added: “I would identify four groups of countries from the highest level of cost synergies expected to the lowest. In the first category, we have countries such as Australia or the UK where Veolia and Suez have a strong presence in a common activity in this case solid waste.
“In those countries, we will derive synergies from very operational merger plans. Typically, we’ll be talking about route optimisation, fleet management or energy from waste availability and maintenance.”
Suez posted its results on the same day. They showed that revenue increased to €8.7 billion in the first half of 2021, up 11% and 6% respectively when compared to 2020 and 2019. The company’s EBITDA rose to €1.6 billion, up 38% from 2020 and 11% from 2019.
Bertrand Camus, Suez’s chief executive, said his company’s results showed its performance was improving “very strongly on all levels”, showing a “clear acceleration” compared to 2019 and a “strong rebound” relative to 2020.
He said: “These excellent results were only possible as a result of the dedication and determination of our teams, and I thank them for their unwavering commitment.”
After months of fevered speculation, on 14 May Veolia agreed to acquire 70.1% of Suez at a price of €20.50 (£17.71) per share (see letsrecycle.com story).
Veolia had already acquired 29.9% of Suez from French utilities firm Engie in October 2020, as it looked to launch a tender offer for the rest of the company (see letsrecycle.com story).
On 28 June Veolia announced that the French Stock Exchange Authority (AMF) had declared its offer for the remaining 70.1% stake compliant. The transaction remains subject to competition clearance by the European Commission.
Veolia hopes to complete the deal “by the end of 2021”.
In a further statement published this week, Veolia also said it was to appoint for Suez executives to its own executive committee, meaning a quarter of its members will come from the latter company.
The appointments of Isabelle Calvez, Sébastien Daziano, Azad Kibarian and Angel Simon will bring the number of members of Veolia’s executive committee to 16 as of the closing date of the merger.
“I wanted to demonstrate to all Suez employees who are called upon to join us that they will have their rightful place within Veolia”- Antoine Frérot, Veolia’s chairman and CEO
On the appointments, Mr Frérot said: “With these announcements, I wanted to demonstrate that we have met our commitments and to testify to all Suez employees who are called upon to join us that they will have their rightful place within Veolia.”
Source: letsrecycle.com Waste Managment