At a time when the U.S. is debating a major infrastructure bill, leading European rivals Veolia Environment (VEOEY 1.54%) 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

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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."