Date: Fri 27-Aug-1999
Date: Fri 27-Aug-1999
French Firm To Buy United Water
BY ANDREW GOROSKO
A French company announced plans this week to buy out United Water, a move
which will not affect United Water's local plans to drill an additional water
well and make pipeline improvements to its water supply system.
United Water is a privately-owned public utility company which supplies
drinking water to more than 1,250 local customers.
Suez Lyonnaise des Eaux, a major private infrastructure services company based
in Paris, announced plans Monday to acquire the shares of United Water it does
not already own in an all-cash transaction. Suez had held a one-third stake in
The planned acquisition of United Water by Suez is part of Suez's strategy to
build a globally competitive infrastructure company, according to a statement
United Water is the nation's second largest water services company, providing
water and wastewater services to more than 7.5 million people in more than 400
communities in 19 states. It reported revenues of $356 million in 1998.
Suez's planned acquisition of United Water will have "no effect whatsoever" on
United Water's local operations, said Kevin Moran, the regional manager for
United Water. "There really is no change to the day-to-day operations of the
water utilities themselves," he said.
United Water also operates water utilities in Woodbury and New Milford.
On completion of the sale transaction, Suez will have worldwide water and
wastewater revenues of more than $7.4 billion. It supplies drinking water to
77 million people and wastewater services to 52 million people. Suez has
overall annual revenues of $32.5 billion with operations in 12 countries.
Under the terms of the sale agreement, which has been approved by the boards
of directors of both companies, United Water shareholders will receive $35.48
in cash for each United Water share held. United water's share price was
$23.06 on August 12. Suez will assume $800 million in net debt and preferred
stock. The transaction, which is subject to regulatory review, is expected to
close during the first half of 2000.
After the transaction, United Water will become a wholly owned subsidiary of
the French firm but will retain its corporate identity.
In the coming months, United Water plans to seek state approvals to increase
from two to three the number of wells in its wellfield in the Pootatuck
Aquifer across South Main Street from Sand Hill Plaza. Although the company's
existing two-well system would be sufficient to supply water in light of an
anticipated almost 100,000-gallon increase in daily water demand, the firm
will seek state permission to drill a third well to increase its water
system's overall reliability. The company has 1,269 local accounts which
consume about 500,000 gallons of water daily.
Also, residential growth which has occurred in the United Water service area
north of Town Hall South will require water supply system improvements in the
near future, including the replacement of water mains and booster pumps.
United Water also operates the Fairfield Hills water supply system for the
state on a contract basis.