--Suez, Veolia reached an agreement in principle to merge after months of wrangling
--Deal values Suez at around EUR13.11 billion
--Companies agreed to enter into definitive merger agreements by May 14
By Mauro Orru
Suez SA and Veolia Environnement SA have reached an agreement in principle to merge that values Suez at around $15.60 billion, putting an end to months of acrimony and legal battles between the two French companies.
Waste and water management firm Suez said Monday that it had agreed with Veolia on Sunday night to enter into definitive merger agreements by May 14 at a price of 20.50 euros ($24.40) per Suez share, valuing Suez at around EUR13.11 billion.
Under the deal, the companies will withdraw all legal proceedings and terminate agreements for disposals, such as a recent deal for Suez to sell its recycling-and-recovery business in Australia to Cleanaway Waste Management Ltd.
"This agreement is beneficial for everyone: it guarantees the long-term future of Suez in France in a way that preserves competition, and it guarantees jobs. All stakeholders in both groups are therefore winners. The time for confrontation is over, the time for combination has begun," Veolia Chief Executive Antoine Frerot said.
Suez and Veolia have been at loggerheads since the end of last summer after Veolia launched an initial bid for a 29.9% stake in Suez from Engie SA at EUR15.50 a share as a prelude to a full takeover, with Suez management quickly rebutting the "hostile" bid.
Suez moved to prevent a future spinoff of its French water operations, placing these in a newly created foundation based in the Netherlands.
The latest agreement effectively nullifies the Netherlands-based foundation, in line with Veolia's plan to create a global "champion of ecological transformation," with revenues of around EUR37 billion.
News of the agreement appeased investors, with both Suez and Veolia rising more than 5% in morning trading in Paris.
Write to Mauro Orru at email@example.com; @MauroOrru94
(END) Dow Jones Newswires