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Veolia agrees to sell Suez’s UK waste unit for $2.4B to Macquarie

Veolia agrees to sell Suez’s UK waste unit for $2.4B to Macquarie

Veolia, the French utility group, has reportedly agreed to sell Suez’s UK waste business to Macquarie, a private equity group based in Australia, for an amount worth €2.4 billion ($2.4 billion) to tackle competition concerns.

Veolia, which approved a €13 billion ($13.3 billion) buyout of its smaller French competitor last year following a protracted buyout battle, has been selling parts of Suez in various overseas markets to alleviate antitrust concerns.

Estelle Brachlianoff, CEO of Veolia, stated that following this deal, Veolia will continue being a prominent participant in the UK's waste industry and, more extensively, in the market for environmental services throughout the region.

The agreement, the final step in the culmination of Veolia's acquisition of Suez, came in consequence of the concerns the UK's Competition and Markets Authority (CMA) raised after the merger of two of the biggest waste and water organizations in the world.

Brachlianoff stated that she was quite convinced that Veolia would receive regulatory permission for the acquisition but added that the company still needed to sell a modest asset in the UK's industrial water market.

Suez's overseas operations have either been incorporated by Veolia or sold off under the provisions of the €13 billion takeover last year. Suez is controlled by investors such as the French infrastructure group Meridiam and US-based Global Infrastructure Partners.

Veolia and Suez previously had to sell off a number of their operations to resolve antitrust problems with 17 more competition regulators, including Brussels.

Veolia stated that after reaching the disposal of the solutions with the European Commission and signing the deal with Macquarie Asset Management, almost all the antitrust buyouts would take less than a year post the takeover of Suez.

All the disposals made in the framework of the antitrust approvals amount higher than the purchase price of Suez. The value of these UK holdings reflects both the initial price as well as the synergies projected from the merger.

Veolia's debt leverage is expected to decrease dramatically through the disposals, which totaled €3.4 billion ($3.4 billion).

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Omkar Patwardhan

Omkar Patwardhan started his professional career in the hospitality industry. Having nurtured a deep-sated passion for words however, he found his way into content writing and now pens down articles for numerous websites, including News Origins, spanning the sectors of business, finance, and technology.