Please ensure Javascript is enabled for purposes of website accessibility

150-Year-Old Rivalry Ends, Creating an Infrastructure Giant

By Howard Smith - Updated Apr 12, 2021 at 12:38PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Global infrastructure companies Veolia and Suez announce a merger agreement.

At a time when the U.S. is debating a major infrastructure bill, leading European rivals Veolia Environment (VEOEY 1.62%) and Suez Environment (SZEVY) have agreed to merge after several months of contentious discussions. The deal will have Veolia purchase Suez for 20.50 euros ($24.39) per share, compared with an initial offer of 15.50 euros. The purchase price represents the equivalent of about $15.5 billion, with the newly combined company expecting annual revenue of about $44 billion.

With the merger, the companies seek to take advantage of a growing focus on infrastructure and climate-change spending from governments worldwide. Though Suez generated more than 60% of its sales in Europe in 2019, the company operates on six continents. North America represented 13% of 2019 revenue, with the balance spread among South America, Africa, the Middle East, Asia, and Australia. 

water treatment piping and infrastructure

Image source: Getty Images.

The larger Veolia has about twice as many employees, and provides water, waste, and energy management to municipalities and industries. Both companies date back to the mid-1800s. 

In a joint statement, the companies said the agreement will create a "new Suez" with assets that are sustainable from both an industrial and social standpoint. It will also support "the implementation of Veolia's plan to create a global champion of ecological transformation," the statement added. 

The majority of shareholders for the new Suez will be French, and must agree to social commitments and long-term ownership, the companies said. Suez chairman Philippe Varin added, "We will be vigilant to ensure that the conditions are met to reach a final agreement that will put an end to the conflict between our two companies and offer development prospects." 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Suez SA Stock Quote
Suez SA
Veolia Environnement S.A. Stock Quote
Veolia Environnement S.A.
$25.26 (1.62%) $0.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/09/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.