Cleanaway consolation prize may be better for investors

Suez and Veolia’s merger has scuppered Cleanaway’s purchase of Suez’s Australian assets for $2.5 billion.

But a clever consolation deal might be just as good. .

That would have been the reaction around Cleanaway’s Melbourne headquarters on Monday evening as news filtered through from Paris that French waste giants Suez and Veolia had, after months of bitter negotiations, finally agreed to a $20 billion merger deal.

The in-principle merger agreement means a deal Cleanaway announced last week to buy Suez’s Australian business for $2.52 billion has been scuppered.

Cleanaway’s $2.5 billion deal with Suez is over, but there’s a handy consolation prize. David Rowe.

As outlined last week, the Suez and Veolia merger will now trigger a second deal for Cleanaway to buy a collection of Suez assets located in Sydney, including two landfills and five transfer stations.

Cleanaway and its advisers, Macquarie Capital and Greenhill, knew there was a strong likelihood that Suez and Veolia would eventually stop their bickering and get a deal done.