CDPQ and French industrial services company Suez have agreed to fully acquire General Electric's water treatment and technology business GE Water for $3.4 billion.
The deal for GE Water is for CDPQ to pay $700 million for a 30 percent stake and for Suez, which specialises in water treatment, to take a 70 percent interest and combine its businesses. Suez said in a statement it is funding its portion through a bridge financing and will possibly refinance it by selling €750 million in bonds.
It's a consolidation move for Suez, one of the largest water treatment companies in the world, which will add to its business a water treatment specialist operating in 130 countries with 7,500 employees.
The C$270.7 billion ($201.05 billion; €188.59 billion) Canadian pension manager said the deal is part of a strategy to increase its exposure to the water sector, citing predicted long-term demand due to water scarcity and impacts of global warming. Global concerns about industrial wastewater makes treatment an “absolute necessity” in the future.
“Operating in a core industry, GE Water has built a premier business with recurring revenues and a high-quality and diversified customer base,” CDPQ chief executive Michal Sabia said.
CDPQ's purchase comes after it sold its 50 percent stake in a UK-based water firm back to Australian fund manager Hastings in February. The pension manager first bought a 50 percent interest from Hastings in 2010 for £165 million ($200.84 million; €188.53 million).