Issue Date: March 20, 2017 | Web Date: March 16, 2017
Suez to buy GE water treatment unit
The French water treatment and waste management company Suez has agreed to buy GE Water & Process Technologies for $3.4 billion. Suez will combine GE Water with its own smaller business to create the world’s third-largest industrial water treatment firm, behind Ecolab and Xylem.
GE Water had sales of $2.1 billion in 2016. Two-thirds of its sales are in services such as chemicals for wastewater and boiler water treatment. The balance comes from systems including water treatment equipment and separation membranes.
Suez CEO Jean-Louis Chaussade says the acquisition will make Suez the only company that can service the entire industrial water treatment supply chain. It will have businesses in instrumentation, equipment, engineering and construction, chemical water treatment, and digital monitoring and analytics.
Suez estimates that the deal will generate $70 million in synergies and $200 million in additional sales from cross selling.
GE got most of its water treatment business by acquiring the chemical maker BetzDearborn from Hercules in 2002. GE announced it was shopping around the business last year. It reportedly received interest from many prospective buyers, including the private equity firm Clayton, Dubilier & Rice, which bought the Solenis water treatment business from Ashland in 2014.
Suez has compelling reasons to buy GE Water, according to Colin Frayne, principal of the water treatment consultancy Aquassurance. He says the water treatment business is moving away from chemical treatment and toward separation membrane technology. “Suez did not have any of that membrane technology of its own,” he says.
GE’s Zenon membranes provide three times the water throughput of conventional water treatment plants at a reduced footprint, Frayne says.
Suez briefly owned the water treatment chemical firm Nalco, now a part of Ecolab, in the early 2000s. Frayne says Nalco wasn’t as good a fit for Suez as GE Water appears to be.
Suez is acquiring the business with the help of the Canadian investor Caisse de dépôt et placement du Québec, which will hold a 30% interest in the combined water treatment business.
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