(Bloomberg) -- Veolia Environnement SA rose to a 13-year high in Paris trading after winning conditional approval from the European Union to acquire French rival Suez SA.
The EU's decision, announced Tuesday, paves the way for the creation of a global giant in environmental services with about 37 billion euros ($42 billion) in annual revenue.
A pledge by Veolia to sell about 40% of Suez's assets to a group led by Meridiam SAS and Global Infrastructure Partners removed most of the EU's competition concerns, the French utility said Tuesday. But the bloc's regulator has called for further divestments representing 325 million euros in revenue, Veolia Chief Executive Officer Antoine Frerot told newspaper Les Echos.
The shares climbed as much as 2.7% on Wednesday to 31.60 euros, the highest since September 2008. The stock traded at 31.20 euros as of 10:25 a.m. in Paris, extending this year's gain to 62%.
The European Commission approved the deal after Veolia pledged to sell some businesses in Europe, including its mobile water-services activities, its French industrial water-management unit and some hazardous-waste landfill operations.
There'll be only “limited impact from additional remedy requirements,” Jefferies International Ltd. analysts wrote in a note. “That's positive for Veolia.”
The French financial market regulator has set Jan. 7 as the closing date for Veolia's takeover bid, with the tender offer for outstanding shares remaining unchanged at 19.85 euros apiece, the utility said. Veolia already owns almost 30% of its rival.
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