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Suez Environment changes size. The French group of services to the environment will take control of the Spanish leader in the treatment of water, Agbar (Aguas de Barcelona). The group led by Jean-Louis Chaussade, already of Agbar 46 shareholder, had failed in June to take majority control but this time he managed to convince his partner Criteria (the investment company of one of the largest financial institutions of Spain, La Caixa) and the autonomous Government of Catalonia. "The operation has the full support of the management of Agbar, which is confirmed in Office, Agbar will keep its Catalan personality and its historical links with Criteria", said yesterday Jean-Louis Chaussade. The issue is sensitive because in Spain (where it has a market share of the treatment of water of 27), Agbar feeds more than 12 million people in drinking water, approximately 10 million people in sanitation is the heavy weight of the environmental sector. With him and his 3.1 billion euros in sales, and especially its employees 14.500, Suez Environment will become a multicultural group. It will also considerably strengthen its position in the international. The Spain, where he realized already 12 of its turnover (mainly through its subsidiary Degremont, who has built more than 20 desalination plants), will of course become its second European pillar. It is a country with high potential for development. A year ago, its water needs and problems of drought forced Agbar to bring water by boat from Marseille! The Spain has a vital need to develop plants for desalination of sea water. This falls well: French master this technology and just opened this summer in Barcelona the largest unit of desalination in the northern hemisphere (200.000 m3d' water treated per day).

From Spain, Agbar the French group will particularly reinforce two developing countries strong, China and the Algeria country of Latin America and acquire two new strong positions on the regulated markets of Chile (where Agbar enjoys a dominant position) and the United Kingdom (where it holds Bristol Water). There are few areas of overlap between the geographical positions of the two groups, which provide no duplicates problem.

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With an increase of 1.2 billion euros of its debt (800 resumption of debt of Agbar million and 400 million disbursement of cash), Suez Environment will focus its interest in Agbar from 46 to 75, its historical financial partner Criteria agreeing to retain only 25 of Agbar. An Agbar refocused on water trades as in Exchange Criteria retrieves all the activity of Agbar in health, and it is not nothing: its medical insurance subsidiary, Adeslas, represents half of the turnover of the group. Suez Environment, it will be virtually neutral since it consolidated far Agbar to 50 in its accounts. Agbar now will be half smaller in turnover but consolidated at 100, the difference will be fine. It will be much more noticeable at the level of the benefit of operations (Ebitda), who will climb as Agbar is much more cost-effective than the French group and will build the margin to the top. The margin of Ebitda 2008 of Suez Environment, with this acquisition would have been to 18.2 against 17 without it, knowing that Agbar has a margin of 28 and that its contribution to Ebitda will therefore approximately 500 million euros in the accounts of the French now, against 310 million previously.

This element, the synergies expected (20 to 30 million euros per year to additional Ebitda) and funding of the operation by Suez Environment at 100 by its liquidity, without bank loan, have rained on the stock exchange that has greeted the acquisition raising 1.19 of Suez environment action, to 15.75 EUR, while the CAC 40 is folded to 1.35.