|Increases Suez Lyonnaise des Eaux' Water-Related Revenues to Over $7.4
Billion Accretive and Value Created
PARIS/NAPERVILLE, Ill. (BUSINESS WIRE) -
Suez Lyonnaise des Eaux (LY: Paris Bourse), a world leader in private infrastructure
services and Nalco Chemical Company (NYSE: NLC), the world's largest provider of water
treatment services and products, announced a definitive agreement for Nalco to be acquired
by Suez Lyonnaise des Eaux in an all-cash transaction of approximately $4.1 billion, or
$53 per share.
Under the terms of the agreement, which has been unanimously approved by the Boards of
Directors of both companies, Suez Lyonnaise des Eaux will seek to acquire all of the
outstanding common shares of Nalco Chemical Company through a tender offer that will
commence within five business days.
This acquisition follows Suez Lyonnaise des Eaux' June 15, 1999 announcement of a
definitive agreement to acquire Calgon, a Pittsburgh-based water treatment company with
annual revenues of close to $300 million.
Nalco Chemical Company, the world's largest water treatment company provides on-site
services to over 50,000 industrial and commercial customers in more than 120 countries.
For 1999, Nalco Chemical Company expects its revenues, including affiliates, to be
approximately $1.94 billion.
Commenting on this transaction, Gerard Mestrallet, Suez Lyonnaise des Eaux' Chief
Executive Officer and President of the Executive Board, said, "The acquisition of
Nalco Chemical Company fits perfectly into our strategic plan, which emphasizes the
international expansion and the integration of our core businesses. As a result of this
transaction, Suez Lyonnaise des Eaux' total water-related revenues will exceed $7.4
billion and, the combined company will be in a strong position to serve industrial,
middle-market, institutional and process customers that are increasingly requiring
Mr. Mestrallet continued, "Globally, the acquisition of Nalco Chemical Company is
another step in our strategy of providing our customers around the world with integrated
services in the water, energy and waste sectors. As a global multi-service group, we
partner with our customers, enabling them to focus on their core operations. After
carefully reviewing the market landscape, we are confident that the people of Nalco
Chemical Company share this vision and that our business model will result in an
accelerated growth rate for Suez Lyonnaise des Eaux' water treatment business.
Suez Lyonnaise des Eaux expects this transaction to be value creating and immediately
accretive to cash flow in the first year and to be accretive to earnings beginning in the
second year. The Company expects to realize more than $100 million in cost savings as a
result of economies of scale, revenue enhancement and development synergies, and to take
full advantage of important cross-selling opportunities.
Edward J. Mooney, Chairman and Chief Executive Officer of Nalco Chemical Company,
noted, "We are very pleased with this agreement, which provides substantial value for
our shareholders as well as key growth opportunities and benefits for our company and its
customers. Our goal at Nalco Chemical Company has been to use our on-site expertise,
technical innovation and global presence to improve the profitability of our customers'
dynamic and changing operations. As part of the Suez Lyonnaise des Eaux Group, we
dramatically increase our ability to provide an expanded array of value-added products and
services to our customers.
"We expect the combination of our worldwide market positions, R&D and
technical-knowhow to give us a meaningful competitive advantage in the marketplace,"
Mr. Mooney added.
Suez Lyonnaise des Eaux will base its worldwide water treatment operating center in
Naperville, under the direction of Mr. Mooney.
The transaction is subject to customary regulatory approvals in the United States and
Europe and is expected to be completed during the third quarter of 1999.
Suez Lyonnaise des Eaux stated that it expects to fund 50% of the all-cash transaction
internally, with the remaining 50% financed by a bridge loan that is already in place.
With annual revenues of $32.5 billion, Suez Lyonnaise des Eaux is a world leader in
private infrastructure services, with operations in more than 120 countries. The Company
is a market leader in the water sector supplying drinking water to 77 million people and
providing wastewater services to 52 million people. The Group's three international core
business sectors are: energy, water, and waste services.
Headquartered in Naperville, Illinois, outside of Chicago, Nalco Chemical Company
employs 7000 people of which about 3600 are engineers and technicians with direct customer
contact and 300 are researchers located in 5 R&D centers.