EDF Said Near to Agreeing Split of Dalkia Assets With Veolia
Electricite de France SA (EDF), the world’s biggest operator of nuclear reactors, and Veolia Environnement SA (VIE) are near an agreement to split their Dalkia energy-services company, said people familiar with the matter.
EDF will take full control of Dalkia’s French activities, while Veolia gains the international operations and pays EDF 550 million euros ($758 million) to offset a valuation gap, said the people, who asked not to be identified discussing a private matter. EDF will also have a right of first refusal over any future sale of Dalkia’s international assets over five years, one of the people said.
The transaction will allow EDF, which owns 34 percent of Dalkia, a bigger anchor in its home market for energy services. Veolia will gain momentum in its plan to expand in growth markets. Dalkia gets almost half its sales in France. The company, which has 49,800 employees in 35 countries, managed revenue last year of 8.9 billion euros, according to its website.
The agreement must be approved by the two companies’ boards, which are meeting today. The transaction is expected to close mid-2014, the people said.
Veolia spokeswoman Sandrine Guendoul declined to comment on Dalkia as did Alison Marquilly, a spokeswoman for EDF. The companies’ plans for Dalkia were earlier reported by Le Figaro and Les Echos.
Discussions over ownership of the asset, which has contracts for heating and cooling office buildings and hospitals, have been contentious, with the two companies having been involved in legal action over it.
In September 2012, EDF Chief Financial Officer Thomas Piquemal proposed ending the alliance at a meeting in London with Veolia Chief Executive Officer Antoine Frerot and CFO Pierre-Francois Riolacci after failing to agree on strategy for expansion abroad, said a person with knowledge with the matter. Talks stalled after that meeting although they resumed in May.
Philippe Villin, a former chairman of the French unit of Lehman Brothers Holdings Inc. who now works independently, is advising both companies on the transaction.
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