The boards of Veolia and Suez have agreed a deal that will see the two companies merge.
A share price of €20.50 (£17.75) per Suez share has been agreed and will be recommended by the Suez board upon signature of the definitive agreement.
The merger would see a new Suez created that would retain the municipal water and solid waste activities of Suez in France, plus the activities of Suez in water in Italy, Czech Republic, Africa, Central Asia, India, China, Australia and the global digital and environmental activities. This new Suez will be owned by a combination of shareholders and employees.
Veolia will take over the rest of the business creating a company with global revenues of €37 billion (£32 billion).
Following the closing of the offer, Veolia will reiterate its social commitments for a period of four years, while it will also look to integrate Suez employees into its management teams.
Veolia chief executive Antoine Frérot said: “I am particularly pleased to announce today the conclusion of an agreement between Suez and Veolia that will enable the construction of the world champion of ecological transformation around Veolia, offering France a reference player in the sector that is probably the most important of this century.
“This agreement is beneficial for everyone: it guarantees the long-term future of Suez in France in a way that preserves competition and it guarantees jobs. All stakeholders in both groups are therefore winners. The time for confrontation is over, the time for combination has begun.”
Suez chairman Philippe Varin added: “We have been calling for a negotiated solution for many weeks and today we have reached an agreement in principle that recognises the value of Suez. We will be vigilant to ensure that the conditions are met to reach a final agreement that will put an end to the conflict between our two companies and offer development prospects.”