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  • French waste management giants Suez and Veolia have agreed to a takeover deal, effectively trashing a multi-billion-dollar bid from ASX 200-listed Cleanaway (CWY) for full control of Suez
  • Cleanaway and Suez agreed to a $2.52 billion takeover deal on April 6, but the deal was conditional on Veolia failing to offer a better price
  • Veolia and Suez had been negotiating a merger deal for months but, up until now, had failed to reach an agreement
  • As such, now that the French businesses have set aside their differences and struck their own deal, Suez will terminate the Cleanway offer on May 6
  • Nevertheless, Cleanway won't walk away completely empty-handed — the company will still snap up $501 million worth of Suez Australian assets
  • These include two landfills and five transfer stations across the greater Sydney basin
  • Over the 2020 calendar year, the combined Sydney assets generated around $193.1 million in net revenue
  • Despite the binned deal, Cleanaway shares are still trading 1.62 per cent higher today at $2.51 each

French waste management giants Suez and Veolia have agreed to a takeover deal, effectively trashing a multi-billion-dollar bid from ASX 200-listed Cleanaway (CWY) for full control of Suez.

Cleanaway and Suez struck their own deal on April 6, with Cleanaway offering $2.52 billion for a Suez takeover.

However, Cleanaway acknowledged at the time it was not the only party vying for Suez' attention. Veolia and Suez had been negotiating a merger deal for months, with the two parties involved in ongoing legal fights as they tussled over an appropriate price.

This meant Cleanaway's takeover bid, though accepted by Suez, was conditional on Veolia failing to offer a better deal. Now, Suez and Veolia have set aside their differences and made an in-principle agreement for a €20.50 (around A$32) per Suez share merger price. Veolia's previous offer was €18 (around A$28) per Suez share.

As such, Suez will now terminate the Cleanaway deal on May 6 as it moves ahead with the Veolia merger.

"The time for confrontation is over, the time for combination has begun," Veolia chief Antoine Frérot said.

Nevertheless, Cleanaway will not be walking away completely empty-handed.

Picking through the scraps

Under the terms of its Suez deal, Cleanaway will now snap up a string of Suez Sydney-based post-collection assets for $501 million.

The assets up for grabs under this fallback deal include two landfills and five transfer stations across the greater Sydney basin.

Over the 2020 calendar year, these combined Sydney assets generated around $193.1 million in net revenue and normalised earnings before interest, tax, depreciation and amortisation (EBITDA) of $72.9 million.

While this is still a far cry below the $1.41 billion in revenue generated by the Suez Australian business over the same time period, the fallback deal still acts as some sort of consolidation for Cleanaway given its scrapped takeover bid.

The fallback deal is still subject to Australian Competition and Consumer Commission (ACCC) approval.

Despite the binned deal, Cleanaway shares are still trading 1.62 per cent higher at 1:20 pm AEST to $2.51 each. The company has a $5.17 billion market cap.

CWY by the numbers
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