SUEZ has signed agreements with its historic partner NWS Holdings Limited (NWS) to acquire NWS’ non-controlling stakes in all their common businesses in Greater China. Through these acquisitions, SUEZ will enhance its scale in Greater China and simplify the structure of its operations in the region. Upon completion of the transactions, SUEZ will hold 100% of both SUEZ NWS and Suyu.
Enhancing SUEZ’s presence in Greater China, a key growth market, has been a strategic priority for many years. SUEZ’s investments in Greater China, carried out notably through an acknowledge partnership culture, have allowed the Group to emerge as a leader in environmental services in the region based on its technology and reputation. SUEZ believes that there is significant potential to leverage its scale in Greater China and its proprietary technology and innovative solutions to drive growth in Asia-Pacific.
These acquisitions are in line with the selective capital redeployment targets identified in the Shaping SUEZ 2030 strategic plan. The optimized Group structure will enhance the Group’s ability to win large-scale and high value-added contracts and to create more value for its stakeholders.
Consideration for the transactions amounts to approximately c. €693m1. Consideration for NWS’ stakes thus values SUEZ NWS and Suyu at an Enterprise Value of c. €1.7bn, of which c. €150m is net debt. In 2019, the two combined entities generated c.€193m EBITDA and c.€113m Net Income. The transactions will be accretive to Recurring Net Income and recurring FCF from completion, both by increasing the income from associates as regards to Suyu and reducing the minority interests as regards to SUEZ NWS.
As wholly owned businesses, SUEZ’s ability to accelerate growth in revenue and earnings in the coming years is enhanced.
Commenting on the transaction, Bertrand Camus, CEO of SUEZ, said: “For more than 40 years, SUEZ, with a strong partnership culture and unique know-how, has been developing its innovative and high value-added solutions in Asia to support sustainable urban development in the region. Today, through the acquisition of NWS’ non-controlling shareholding in SUEZ NWS and indirect 50% interest in Suyu, SUEZ reaffirms its commitment in the region to invest and develop, alongside local authorities as well as International and Chinese industries, sustainable solutions with a positive impact on the climate, natural capital and quality of life. With this operation, the Group continues to strengthen its position as a leader in environmental services in Asia whose expertise and technology give it a unique ability to win high value-added contracts. Although this ends one phase of our relationship with NWS, we intend to continue to explore other ways of the two groups working together. These acquisitions mark yet another landmark in the asset rotation plan of our SUEZ 2030 strategy. Accretive to our earnings, they further reposition SUEZ towards the most value-creating activities and geographies offering strong growth potential.
