The French environmental services group Veolia announces the launch of a share capital increase with shareholders’ preferential subscription rights in an amount of approximately €2.5 billion. Hence, the transaction allows existing shareholders to avoid a dilution of their voting rights in the shareholders meeting by way of taking part in the capital increase. At the same time, new investors can also become shareholders.

The proceeds from the capital increase shall be used to partly finance the acquisition of SUEZ, a French-based utility company which operates predominantly in the water and waste management sectors. Veolia already owns 29.9% of SUEZ and launched a tender offer on the remainder of the share capital on 29 July 2021. Both companies had signed a combination agreement in May 2021 which is expected to be closed by year-end.

The share capital increase is characterized by a subscription ratio of 4 new shares per 21 existing shares. The subscription price is €22.70 per new share while the discount to the Theoretical Ex-Rights Price is 19.1% and hence comparatively moderate. The subscription period starts on 21 September 2021 and ends on 1 October 2021. Settlement, delivery and listing of the new shares shall be on 8 October 2021.