Suez Lyonnaise Des Eaux Acquires United Water Resources
Under the terms of the agreement, Suez Lyonnaise des Eaux will acquire the remaining 69.9% of common shares of United Water Resources that it does not already own. United Water Resources will become a wholly owned subsidiary of Suez Lyonnaise des Eaux, but will retain its corporate identity.
Suez Lyonnaise des Eaux has held a significant equity stake in United Water since 1994, and in 1997, the companies created jointly-owned United Water Services to compete for non-regulated water and wastewater management contracts in North America. The joint venture is owned on a 50-50 basis.
Under the terms of the agreement, which have been approved by the Boards of Directors of both companies, United Water Resources' shareholders receive $35.00 in cash for each United Water share held. It also permits United Water to increase its regular quarterly dividend for three quarters and to pay a special dividend at closing for an aggregate dividend increase of 48 cents per share. The total cash to be paid to United Water shareholders is $35.48, including the dividend increases, representing a premium of approximately 54% over United Water's closing price of $22.98 on August 12, 1999. The transaction values all of the issued common shares of United Water at $1.36 billion ($900 million for 67 percent). Suez Lyonnaise des Eaux will assume about $800 million in net debt and preferred stock.
The transaction is still subject to the approval of certain public service commissions in the states in which United Water owns regulated utilities. The company has already received approval from three regulatory commissions (Arkansas, Delaware, Missouri) and expects to close the transaction during the first half of 2000.
Edited by Tracy Fabre