By Scott Kanowsky
Investing.com -- Shares in Veolia Environnement SA (EPA:VIE) rose by more than 2% on Monday after the French utility announced it had agreed to sell Suez's U.K. waste management business for €2.4B to Australia's Macquarie Group (OTC:MQBKY).
The move, which values the unit at 16.9 times its 2021 normalized core earnings, comes as Veolia looks to quell concerns from British antitrust regulators following its planned merger with Suez.
"We are very satisfied with this transaction, which is being carried out under excellent conditions that once again demonstrate the attractiveness of the environmental services business and the relevance of our proposal for remedies to the CMA," said Veolia chief executive officer Estelle Brachlianoff in a statement.
The U.K. Competition and Markets Authority will still need to approve the deal.
Brachlianoff added that Veolia will remain a "major player" in the U.K. waste management market with revenues of around €2B.
Veolia's disposals to remedy competition worries stemming from its tie-up last December with Suez will amount to €3.4B after the agreement is finalized, the company said. Veolia took an 86% stake in Suez after the €13B merger closed in early January.
The group's debt leverage will also decline significantly, giving Veolia "additional investment capacity to finance growth in high value-added markets."