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 leaderin waterresource 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.
1 Or $3.415Bn assuming EURUSD of 1.06
2 Based on 2016 estimated recurring EBITDA and capex excluding one‐off implementation costs