Today SUEZ announces that, together with Caisse de dépôt et placement du Québec (“CDPQ”), it has entered into a binding agreement to purchase GE Water & Process Technologies (“GE Water”) from General Electric Company for €3.2Bn1 enterprise value in an all‐cash transaction.
GE Water is a worldwide leading systems and services provider for industrial clients, supplying state-of‐the-art water, waste‐water and process systems solutions to blue‐chip customers. GE Water generated ~$2.1Bn revenues in 2016 with 7,500 highly‐skilled salesmen and engineers with strong digital capabilities.
The transaction, unanimously approved by the Board of SUEZ, combines two complementary players, covering the entire value chain making SUEZ a leader in water resource management. It enhances SUEZ’ long term profitable growth, and offers an unparalleled value proposition to SUEZ shareholders:
Jean‐Louis Chaussade, CEO of SUEZ, said: “I am very proud to announce the acquisition of GE Water, which will accelerate the implementation of SUEZ’ strategy by strengthening its position in the promising and fast‐growing industrial water market. This combination will create further value for both our employees, clients and shareholders. Clients will benefit from the combined knowledge, expertise, geographic footprint and leading edge products and services available. The transaction will also deliver strong value to our shareholders by enhancing SUEZ’ profitable growth profile. I look forward to integrating GE Water’s highly skilled staff to our teams to form an unparalleled industrial water platform. We are also thrilled to join forces with CDPQ, which shares our long term vision for our business.”
“GE Water has positioned itself as a key player in the water treatment industry thanks to its cutting-edge technology and a management team that has proven itself highly skilled at leveraging that competitive advantage,” said Michael Sabia, President and Chief Executive Officer at CDPQ. “Operating in a core industry, GE Water has built a premier business with recurring revenues and a high‐quality and diversified customer base. This investment is therefore highly aligned with CDPQ’s long‐term vision and its strategy of increasing its emphasis on stable assets anchored in the real economy, alongside key operators such as SUEZ.”
Commercial synergies and efficient complementarities
GE Water is very well positioned in the €95bn global industrial water market, growing at an expected 5 % per annum, driven by regulations, environmental and economic performance. GE portfolio is diversified and well balanced in terms of geographies (50% of the revenues in North America and 50% in the rest of the world) and verticals.
The acquisition will enable SUEZ to realize significant cost and revenue synergies:
Full benefit of cost and revenue synergies realized by year 5:
Value‐enhancing transaction, fully aligned with the group’s financial discipline
The acquisition of GE Water will enhance shareholder value:
This transaction is expected to close by mid‐2017 and is subject to receipt of required regulatory approvals (merger control authorities), including the European Union and the United States, and other customary closing conditions.
The implementation of this project is previously submitted to the opinion of the European Works Council.
We are at the dawn of the resource revolution. In a world facing high demographic growth, runaway urbanisation and the shortage of natural resources, securing, optimising and renewing resources is essential to our future. SUEZ (Paris: SEV, Brussels: SEVB) supplies drinking water to 92 million people, delivers wastewater treatment services to 65 million, recovers 16 million tons of waste each year and produces 7 TWh of local and renewable energy. With 82,536 employees, SUEZ, which is present on all five continents, is a key player in the sustainable management of resources. SUEZ generated total revenues of €15.3 billion in 2016.
Caisse de dépôt et placement du Québec (CDPQ) is a long‐term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2016, it held $270.7 billion in net assets. As one of Canada's leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure and real estate.
About GE Water
GE Water & Process Technologies is a leading global water franchise providing equipment and technology solutions, as well as chemical and monitoring solutions to industrial and municipal clients. With operations in 130 countries and employing over 7,500 people worldwide, GE’s Water & Process Technologies applies its innovations, expertise and global capabilities to solve customers’ toughest water and process challenges. It offers a comprehensive set of chemical and equipment solutions, as well as predictive analytics, to enhance water, wastewater and process productivity. Water & Process Technologies strives to enable customers to meet increasing demands for clean water, overcome scarcity challenges, strengthen environmental stewardship and comply with regulatory requirements.
1 Or $3.415Bn assuming EURUSD of 1.06
2 Based on 2016 estimated recurring EBITDA and capex excluding one‐off implementation costs