Veolia to take full ownership of water management unit in $1.75 billion deal, gets $750 million in new contracts
May 7 (Reuters) - French group Veolia (VIE.PA), opens new tab said on Wednesday it will buy the 30% of shares in Water Technologies and Solutions (WT&S) that it does not already own from Quebec Deposit and Investment Fund (CDPQ) for $1.75 billion.
The waste and water management company also announced $750 million in three new contracts to supply water to clients in the energy and semiconductor sectors.
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Veolia also estimated that gaining full control of WT&S will help it extract 90 million euros ($102.3 million) of additional cost synergies by 2027.
"This (deal) will allow us to take full control of all our water technology branches, and thus deliver the full potential of this activity, which is at the heart of our strategic business," CEO Estelle Brachlianoff told Reuters.
Over half of WT&S's business is in North America, the CEO added in a press call, consistent with Veolia's plan to strengthen its presence in water technologies activities and in the United States, both identified as priority growth boosters.
It expects the WT&S deal to close by the end of June.
Veolia said the new contracts included a $550 million deal with a very large microelectronics factory in the American Midwest, and smaller contracts in San Francisco, Brazil and the UAE.
"By 2027, we want to increase our turnover in the United States by 50%, and we want to double the size of our business in the United States by 2030," Brachlianoff said in the press call.
Veolia reported 20% of group sales in France, 60% of group sales in Europe, including France, and 40% of group sales outside Europe, including $5 billion in the U.S. in 2024, the CEO said.
The company posted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 1.7 billion euros for the first quarter, up from 1.62 billion euros a year ago.
It also reiterated its guidance for 2025. ($1 = 0.8814 euros)
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Shell, the biggest European oil major, is also a huge investor in the United States, which accounted for 23% of its 2024 revenue of $284 billion. It invests about 30% of its capital expenditure in the country, where it has oil and gas production facilities, a petrochemicals plant, a vast retail network, liquefied natural gas (LNG) purchasing agreements and major trading operations. The United States became increasingly important to Big Oil companies in recent decades thanks to its stable fiscal and regulatory environment while other regions presented a variety of challenges. Take Russia, for example. Its vast oil and gas resources started attracting investments from many companies in the 1990s after the collapse of the Soviet Union, but the country is now uninvestible owing to western sanctions that followed Russia's invasion of Ukraine in 2022. Similarly, western companies have limited opportunities to invest in the Middle East, where national oil companies dominate. 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