SUEZ ENVIRONNEMENT (EPA:SEV) The Board of Directors of SUEZ has determined that Veolia’s industrial project and €18 per share offer are not acceptable

Transparency directive : regulatory news

26/02/2021 07:31

Press release

Paris, February 26, 2021 - 7:30 a.m. CET

The Board of Directors of SUEZ has determined that Veolia's industrial project
and EUR18 per share offer are not acceptable

Having met on several occasions during January and February to review the terms
of Veolia's offer, the Board of Directors of SUEZ, during its meeting held on
February 24th, 2021, unanimously decided that the conditions were not met to
support such a project.

The Board of Directors reiterates its objective to reach a solution that
delivers a fair valuation of the Group for its shareholders, provides social
guarantees for employees, ensures that all the Group's commitments to its
customers are maintained and conforms to SUEZ's corporate interest.

A transaction that would involve SUEZ's dismantling threatens the Group's
corporate interest.

The transaction planned by Veolia threatens our SUEZ 2030 strategic plan and
would negatively impact SUEZ's value.

Veolia's scale objective does not bring with it any clear benefits for the
provision of essential services. It does not enhance technological innovation,
quality of service or agility which are SUEZ's strengths as a global leader
working to meet the major challenges of the ecological transition.

Our 2020 results confirm that the price offered by Veolia, and which would only
be payable in May 2022 at the earliest, is not satisfactory:

* The intrinsic value of SUEZ is well above the price offered, SUEZ's intrinsic
value is illustrated by our 2020 results and by the accelerating financial
trajectory for 2021. Revenue growth, enhanced profitability and cash flow will
drive dividend growth and support the payment of exceptional dividends. Our
progress in delivering our SUEZ 2030 strategic plan highlights our ability to
focus the Group on the highest-growth areas.

* The economic and financial environment has improved significantly since
Veolia acquired Engie's stake in SUEZ; since October 4, 2020, the CAC 40 index
has gained c. 20%.

* The EUR18 per share (cum dividend) offer price discriminates against SUEZ's
minority shareholders as compared with Engie. Engie sold its SUEZ shares at a
price of EUR18 on October 6, 2020. Minority shareholders in SUEZ, would not
receive payment until May 2022 at the earliest, and Veolia's offer remains
subject to significant execution risks related to the required regulatory
authorisations.

* In this respect, and considering the improved prospects driven by the
continued execution of the SUEZ 2030 strategic plan, the reference share price
as well as other valuation metrics selected by Veolia in its draft offer
document are out of date and misleading. The price offered by Veolia represents
a premium of merely 13.1% versus SUEZ's share price as of February 21, 2020
(pre-Covid outbreak).

* The EUR18 per share offer price does not take into account the synergies that
Veolia has put forward in its offer document.

The planned combination threatens SUEZ's employees

The social commitments made by Veolia are unsatisfactory. In practical terms,
their duration is limited, they are vague in certain aspects and in part
non-binding.

The proposed combination also exposes our customers and shareholders to
significant execution risk

The proposed transaction raises significant antitrust issues, both within the
European Union and in the UK: 22 competition authorities must rule on the
transaction.

Competition guarantees quality service at a fair price and is essential to meet
the needs of public and private customers who have expressed their concern
about this Veolia's offer. Completion of this transaction would put at risk
SUEZ's commitments to its customers in water and waste recycling and recovery
activities.

Other elements of this project remain unresolved at this stage

* Veolia's offer does not include all the necessary information to allow
shareholders to decide on whether or not to tender their shares. In particular,
Veolia does not provide any details regarding the conditions of the projected
sale of SUEZ Water France to Meridiam and remains vague with respect to Engie's
top-up rights.

* Veolia's offer is incompatible with the provisions governing tender offers,
in particular its unprecedented term which extends for close to thirteen
months;

* The filing of the offer violated an unconditional amicable commitment made by
Veolia to SUEZ.

The Board of Directors reiterates its wish to find a negotiated solution. It
will take whatever steps necessary to make sure that Veolia does not impose its
interests at SUEZ's shareholders' meeting.

In accordance with the General Regulations of the Autorité des marchés
financiers, the Board of Directors has appointed Finexsi as an independent
expert. Following this preliminary position, the Board will meet at a later
stage to express its reasoned opinion ("avis motivé").

Lastly, the Board of Directors would like to express its gratitude to all SUEZ
employees for their commitment to SUEZ's customers through the pandemic and the
disruptions linked to the Veolia offer. SUEZ's Board will ensure that their
interests are upheld under all circumstances.

CONTACTS:

Media
Isabelle Herrier Naufle
isabelle.herrier.naufle@suez.com
+33 6 83 54 89 62

Analysts/Investors
Cécile Combeau / Baptiste Fournier / Julien Minot
+33 1 58 81 55 71 / 54 85 / 37 09

About SUEZ:
Since the end of the 19th century, SUEZ has built expertise aimed at helping
people to constantly improve their quality of life by protecting their health
and supporting economic growth. With an active presence on five continents,
SUEZ and its 90,000 employees strive to preserve our environment's natural
capital: water, soil, and air. SUEZ provides innovative and resilient solutions
in water management, waste recovery, site remediation and air treatment,
optimizing municipalities' and industries' resource management through "smart"
cities and improving their environmental and economic performance. The Group
delivers sanitation services to 64 million people and produces 7.1 billion m3
of drinking water. SUEZ is also a contributor to economic growth, with more
than 200,000 jobs created directly and indirectly on an annual basis, and a
provider of new resources, with 4.2 million tons of secondary raw materials
produced. By 2030, the Group is targeting 100% sustainable solutions, with a
positive impact on our environment, health and climate. SUEZ generated total
revenue of EUR18.0 billion in 2019.

Find out more about the SUEZ Group on the website & on social media
Facebook, Twitter, Linkedin, You Tube

SUEZ
Siège social : Tour CB21 ? 16, place de l'Iris, 92040 Paris La Défense
Cedex, France ? Tél. : +33 1 58 81 20 00 ? www.suez.com
SA au capital de 2 513 450 316 euros ? SIREN : 433 466 570 RCS Nanterre ?
N° TVA : FR76433466570

SUEZ ENVIRONNEMENT's latest news

01/02/2022 08:00

SUEZ ENVIRONNEMENT (EPA:SEV) The Board of Directors of SUEZ has determined that Veolia’s industrial project and €18 per share offer are not acceptable

Transparency directive : regulatory news

SUEZ ENVIRONNEMENT's latest news

Other stories