Veolia on August 30 announced an unsolicited offer to acquire Engie’s 29.9% stake in fellow Parisian waste and water group Suez. The company said that it would also file a voluntary tender for Suez’s remaining shares 12-18 months after the offer is accepted, subject to regulatory approval. Veolia and Suez are leading global recycling and waste management groups, with last year’s sales of €27.2 billion and €18.02 billion, respectively.
Analysts said that through the acquisition, Veolia could create the world’s top waste and recycling management group. The consolidation will also help both companies to manage a leading position in the recycling value chain. According to Veolia, the merger can strengthen its position in Spain, northern Europe, North America, South America, Asia, and Australia.
Analysts said that consolidation would be a new trend in the recycling industry after being hit by the coronavirus pandemic. Many customers have shifted back to virgin plastics due to low prices during the health crisis. Worker shortages and logistic problems also affected the recycling industry. Veolia’s sales in recycling dropped 10.8% year on year in the second quarter of 2020, while Suez’s sales fell 12.7%.
