French water and waste group Veolia has said it will sell the UK waste business of recycling group Suez to Macquarie Asset Management for €2.4bn following pressure from the UK’s competition watchdog.
Paris-based Veolia struck a deal to buy rival Suez last year following a hard-fought takeover battle between the world’s largest waste and water companies.
However, the UK’s Competition and Markets Authority warned that the merger risked driving up council bills in Britain, and said Veolia could either sell its entire UK waste business or that of Suez.
Macquarie Asset Management, the £440bn investment management arm of Australia’s biggest investment bank, is known for its experience owning UK infrastructure assets. Other investments in the country include gas distribution network Cadent and telecoms group KCom.
Veolia said the deal to dispose of Suez’s UK business represented a valuation of 16.9 times earnings before interest, taxes, depreciation and amortisation in 2021 and was significantly higher than the company’s acquisition price.
“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,” said Veolia’s chief executive Estelle Brachlianoff in a statement on Monday.
She added that Veolia would “remain a major player in the waste sector in the UK and, more broadly, in the environmental services market in the region”.
Suez had sought to stay independent and, under the complex takeover, it held on to its operations in France while Veolia took over its UK arm.
“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,” said Suez UK chief executive John Scanlon.
