French water service company Suez and Canadian investment fund CDPQ have recently acquired GE Water for about $3.37 billion (USD). Suez being the buyer threw a curveball in market expectations, partially because Suez having the capital needed for the deal was surprising to some.
According to the acquisition analysis report by Bluefield Research LLC, The strategic change in Suez’s policy stems from commercial restrictions in the European market. A growing preference in European cities for handling municipal water services independently instead of reaching out to private companies has made Suez buy the American operational branch of GE, hence gaining a foothold in the American market.
Suez’s CEO has claimed to the press that branching out to the commercial water market is more important to Suez than playing in the municipal field, a statement which also explains the acquisition. Suez’s revenue stands at about €15.3 billion (EUR), and it employs about 82 thousand people providing water services to different destinations worldwide. Buying GE’s water treatment unit will significantly improve sales and liken Suez to Veolia- making Suez one of the biggest commercial manufacturers of chemical systems for water purification. GE’s water treatment unit, which holds Betz labs for chemical water purification, will allow Suez to expand its business in monitoring and controlling water quality.