Suez seeks to take over its IWS nugget from Veolia
After getting its hands on the IWS subsidiary during its takeover bid for Suez, Veolia must put this hazardous waste treatment activity back on sale under pressure from Brussels. The "new Suez" is now seeking to recover this lucrative asset, but will have to fight against four other candidates.
Three months after the finalization of Veolia's takeover bid for Suez, the situation may seem surreal. The new Suez seeks to recover a piece of one of its own subsidiaries, IWS (Industrial Waste Specialties), from the group led by Antoine Frérot. This entity specializing in the treatment of hazardous waste has however become the property of Veolia since January. The group was keen to absorb and keep this subsidiary entirely because of its high intrinsic profitability.
Brussels imposes the sale of IWS France
But the European Commission has put a grain of sand in the plans of the French water and waste management giant. In exchange for the green light granted in mid-December to the takeover bid on Suez, Brussels demanded that Veolia separate from the French part of IWS. Objective: to prevent the group, which already owns five of the thirteen French sites dedicated to this hazardous waste, from occupying a hegemonic position. By retaining IWS, Veolia would have owned twelve of the thirteen treatment sites dedicated to this type of waste in France.
As a result of this stopover in Brussels, IWS France finds itself today in a kind of no man's land. The subsidiary is managed by independent management, distinct from those of Veolia and Suez, and placed under the control of a "monitoring trustee", an agent appointed by the European Commission. This temporary situation will not end until the sale is finalized.
Responsible for the operation, Veolia recently launched the process by giving a mandate to the investment bank Morgan Stanley. The new Suez led by Sabrina Soussan is therefore not certain of being able to get its hands on this former asset, which its predecessor Bertrand Camus had let go without reacting. Because it is not an over-the-counter process, but a call for competition, the interest for Veolia being to raise the stakes. This part of IWS put up for sale would be valued at around 600 million euros.
Four other candidates in the running
But this subsidiary whets the appetites. In addition to the former parent company, four other candidates would be in the running. In the French industrial camp, there are two other groups on the lookout, Paprec and Séché environnement. Among the Europeans, the Spanish Urbaser environnement and the German Remondis are also looking at the file.
If all seem equal on the starting line, the state of forces varies from one candidate to another. Listed on the stock exchange, the Séché group, which already has a site dedicated to hazardous waste, might be forced to abandon certain niches in the treatment of waste. The ambitious Paprec could meanwhile be handicapped by its current debt. For its part, Urbaser environnement, absorbed in 2021 by the American investment fund Platinum Equity, comes with comfortable cash to invest. Its new shareholder wants to make France - where it achieves 250 million euros in turnover - one of its strategic targets to increase its business.
As for Remondis, the IWS opportunity would allow its shareholder, the Rethmann group, to take a little revenge in the Suez case. Also financially sound, the German industrialist had officially applied to take at least 20% of the capital of the new Suez. But the industrial and political players in the file preferred the American investment fund Global Infrastructures Partners (GIP), which owns 40% of the operator.
Finally, Suez keeps all its chances, provided it can further increase its debt. Operationally, the possible return of its former subsidiary under its flag would provide industrial and managerial continuity.