Macquarie has agreed to buy Suez‘s UK waste business for €2.4 billion (about $2.45 billion) from Veolia, adding to the Australian asset manager’s growing portfolio of European infrastructure assets.
Macquarie has been on the acquisition trail for European infrastructure assets this year. In March, Macquarie and British Columbia Investment Management agreed to buy 60% of UK-headquartered National Grid‘s gas transmission and metering unit, in a deal valuing the business at £9.6 billion (about $11.6 billion). Earlier this month, Macquarie acquired a stake in ST Telemedia‘s Virtus Data Centres, which houses cloud computing services in London and abroad, as well as a City Flex logistics facility in Poland.
As inflation rises, the market for infrastructure is becoming more attractive, benefiting from traits that insulate it from rising costs and, in certain cases, increases the value of investments in the sector. Examples may include assets being part of the energy sector, with its recent uptick in prices, or areas such as toll roads that can more easily increase their costs to compensate.
This year has seen a huge uptick in deal value in the European infrastructure space, with €41.7 billion invested as of the end of July, according to PitchBook data. The vast majority of the total transaction value comes from mega-deals, including Veolia’s buyout of Suez and Blackstone‘s $26.5 billion recapitalization of last-mile logistics service provider Mileway.
This latest deal for the Suez assets is part of Veolia’s attempt to satisfy antitrust concerns from the UK’s Competition and Markets Authority over the merger with its smaller peer, which Veolia agreed to acquire in 2021 for €12.8 billion. The regulator argued that the merger would lead to a loss of competition in the supply of several waste and water management services in the UK. Veolia had rebuffed a takeover bid from Ardian and Global Infrastructure Partners before acquiring Suez.
Featured image via DedMityay/Shutterstock
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