BlackRock-Backed Suez Halts Process to Sell Chinese Water Assets, Sources Say

(Bloomberg) -- Suez SA, a French water and waste-treatment company partly owned by BlackRock Inc., has paused a process to sell Chinese assets as it wants to keep growing in the world’s second-largest economy for longer, people familiar with the matter said.

In a recent message to employees reviewed by Bloomberg News, Suez’s new Chief Executive Officer Xavier Girre announced that the company decided to stay in China, following a global strategic review of the group’s markets and assets.

A Suez representative confirmed the company’s intention to keep the business in China when contacted by Bloomberg News.    

State-owned firms Beijing Capital Group Co., China State Construction Engineering Corp. and Guangdong Holdings Ltd. were among parties that expressed interest for Suez’s Chinese water infrastructure assets, Bloomberg News reported in June. Back in April, a spokeswoman for Suez said the company was making a market assessment of its operations, though it had no plan to sell its Chinese assets.

While the process has paused for now, potential buyers may still be interested in the assets, according to people familiar with the matter who declined to be identified as the talks aren’t public. It’s still possible for Suez to revive a potential sale, some of the people said.

Suez entered China’s water market in 1975. Suez bought about $843 million worth of waste and water assets from NWS Holdings Ltd. in mainland China, Macau, Hong Kong and Taiwan in 2021 when it was seeking to fend off a takeover approach from Veolia Environnement SA. Veolia, which completed its takeover of Suez a year later, sold about half of Suez’s assets to a consortium backed by Meridiam SAS and Global Infrastructure Partners in 2022 to ease antitrust concerns. BlackRock acquired GIP in a $12.5 billion deal last year.

Suez has more than 40 contracts based on partnerships with local authorities and companies in China, as well as research and development centers specializing in municipal and industrial water and waste treatment in Shanghai, Chongqing, Beijing, Changshu and Macau, according to its website.

The company appointed Girre as its new CEO in July. Its earnings before interest, taxes, depreciation and amortization dropped 1% in the first half of this year, as weaker waste recycling tied to manufacturing industries offset growth in water activities, notably in China, India, the Middle East and Africa.

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