* Suez makes big leap into industrial water treatment
* GE Water deal gives it access to blue-chip customers
* Canadian fund CDPQ takes 30 pct stake in joint venture
* Industrial water sector bigger than municipal market
(Adds detail on other bidder, finance)
By Geert De Clercq
PARIS, March 8 French waste and water group Suez
has boosted its industrial water treatment business with the 3.2
billion euros ($3.4 billion) acquisition of GE Water from
The deal will give Suez access to most major industries
globally, including food and beverage, oil and gas, power,
mining, pharmaceuticals, and micro-electronics and will make it
a supplier to blue-chip companies such as Exxon-Mobil, Total,
Shell, BASF, Nestle, Cargill, Intel, Samsung and Pfizer.
Chief Executive Jean-Louis Chaussade told reporters on
Wednesday the industrial water market was more important than
Suez's traditional municipal water market, because industry
accounts for 15-20 percent of global water consumption compared
with just 5-8 percent for human consumption in cities.
In an all-cash deal, Suez and Canadian fund Caisse
de dépôt et placement du Québec (CDPQ) will acquire 100 percent
of GE Water's equity and debt through a 70/30 joint venture, to
which Suez will contribute its existing industrial water
activities. The new business will operate under the Suez brand.
The business will have revenue of about 2 billion euros,
compared with Suez's 2016 revenue of 15.3 billion euros, and
will employ 10,000 people, of which 7,500 will come from GE.
The industrial water market is worth about 95 billion euros
globally and grows about 5 percent per year, Chaussade said.
Chaussade said there had been several rounds of bidding for
GE Water, but believed that in the third and final round it was
up against U.S. fund Clayton, Dubilier & Rice.
Suez has secured bridge financing for the deal, and may
refinance it with a 750 million euro capital increase.
Its main shareholders, Engie, CriteriaCaixa and
Caltagirone Group, have confirmed their intention to participate
in the capital increase for their pro-rata share, Suez said.
Lead shareholder Engie said the cost of subscribing to the
full extent of its 32.6 percent stake would be 240 million
Suez finance chief Christophe Cross said that once the deal
was finalised, probably early in the third quarter, Suez would
prepare a capital increase.
Suez will also issue a 1.1 billion euro long-term senior
bond and 600 million worth of hybrid bonds. CDPQ will contribute
700 million euros of equity to the venture.
Chaussade said Suez expected 200 million euros of revenue
synergies per year in the group's water business, but had not
included possible synergies between water and waste.
"Cross-selling between our water and waste units will be
reinforced, as clients increasingly want environment services
that include water and waste treatment," he said.
In the past 12 months, Suez shares have fallen about 13
percent, making them the second-worst perfomer in the Stoxx
European Utilities index after bigger peer Veolia
, whose shares are down about 22 percent.
Both firms are trying to diversify into industrial water as
their traditional European water business stagnates.
($1 = 0.9483 euros)
(Reporting by Geert De Clercq; Editing by Adrian Croft and Mark