SUEZ, together with CDPQ, acquires GE Water, becoming a major player in the industrial water services market

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 allcash transaction.  

GE Water is a worldwide leading systems and services provider for industrial clients, supplying state ofthe art water, wastewater and process systems solutions to bluechip customers. GE Water generated ~$2.1Bn revenues in 2016 with 7,500 highlyskilled 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:

  • Broadened accessto industrial clients, with significantscale up effect boosting gotomarket capabilities and sales force
  • Strengthened international footprint in key geographies, notably in the US and emerging markets, reinforcing the group’s position in a fast growing addressable market of c. €95Bn worldwide
  • Increased innovation capabilities to deliver performing solutions, with a    worldwide network of R&D centres, a large portfolio of patents and a cutting-edge platform “InSight”
  • Expected to generate significant cost and revenue synergies
  • EPS accretive and positive free cash flow from year one ; double‐digit EPS accretion based on run‐rate cost‐synergies
  • Bridge financing fully secured, to be refinanced through a capital increase of c. €0.75Bnand a combination of long‐term senior and hybrid bonds. SUEZ main shareholders Engie, CriteriaCaixa and Caltagirone Group already confirmed their intent to participate in the capital increase for their pro rata share.
  • Fully aligned with the Group’s financial discipline, transaction to maintain strong investment grade rating profile


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:

  • The integration of GE Water will give SUEZ the opportunity to widen its systems and service offerings, leveraging SUEZ expertise in O&M and GE Water best‐in‐class digital platform InSight. The cross selling opportunity is further increased by SUEZ and GE Water’s complementary customer base, industry verticals & value chain and geographies;
  • The contribution of GE Water to SUEZ Industrial Solutions business will enable the group to further optimize its operations in manufacturing supply chain, engineering and services deliveries;
  • Finally, the transaction provides potential for further cooperation and business opportunities with SUEZ’s other businesses, notably in the areas of recycling and resources / energy recovery

Full benefit of cost and revenue synergies realized by year 5:

  • €65 million impact on EBITDA from identified annual run‐rate cost synergies (of which 80% achieved in year 3);
  • implementation costs, spread over 2017‐19, equal to one year of cost synergies
  • €200 million of revenue synergies per year;

Valueenhancing transaction, fully aligned with the group’s financial discipline

The acquisition of GE Water will enhance shareholder value:

  • Improved top‐line growth profile;
  • EPS accretive from year one;
  • Double‐digit accretion on EPS based on run‐rate cost‐synergies;
  • Positive on Free cash‐flow from year 1;

Transaction terms

  • SUEZ will acquire along with CDPQ, in a 70/30 joint venture, 100% of GE Water for an enterprise value of €3.2Bn, in an all cash transaction. SUEZ will then contribute its existing industrial water activities (following consultation of Work Councils) to the newly dedicated Industrial Water business unit. This acquisition price represents 10.0x2016 EBITDA including cost synergies and 12.8x 2016 operating cash flow including synergies2
  • SUEZ has a fully underwritten bridge financing in place for the transaction, contemplated to be refinanced through :
    • a capital increase of c. €0.75Bn; SUEZ main shareholders, Engie, CriteriaCaixa and Caltagirone Group confirmed their intent to participate in the capital increase for their prorata share.
    • a long‐term senior bond for c.€1.1Bn
    • hybrid bonds for c.€0.6Bn
    • c.€0.7Bn equity provided by CDPQ
  • The company’s objective is to preserve its strong investment grade rating profile

Next steps

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


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