Suez and Canada’s CDPQ (Caisse de depot et placement du Quebec) are to buy GE Water & Process Technologies for Euro 3.2 billion ($3.37 billion) in cash.
They will establish a joint venture to be owned 70/30 to buy the business.
Suez will take 70 per cent and will add its industrial water business to GE Water, creating a new global industrial water business unit within Suez.
CDPQ, an institutional investor that has looked to increase its exposure to the water sector, will invest $700 million for 30 per cent.
Suez has fully underwritten the bridge financing in place for the transaction, and may refinance with a capital increase of Euro 750 million.
Suez’s main shareholders — Engie, CriteriaCaixa, and Caltagirone Group — will participate in the capital increase for their pro rata share.
“I am very proud to announce the acquisition of GE Water, which will accelerate the implementation of Suez’s strategy by strengthening its position in the promising and fast-growing industrial water market. This combination will create further value for both our clients and shareholders. Clients will benefit from the combined knowledge, expertise, geographic footprint and leading edge products and services available,” said Suez chief executive Jean-Louis Chaussade.
“The transaction will also deliver strong value to our shareholders by enhancing Suez’s 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, a financial investor which shares our long term vision for our business,” Chaussade added.