A 50% stake in French water utility company Saur is set to be acquired by a consortium formed of Dutch public pension fund PGGM and DIF Capital Partners.
Swedish investment firm EQT’s Infrastructure III and IV funds are selling 25% to each of the institutional investors.
In February when the deal was first mooted, Saur was valued at about EUR3 billion (US$3.2 billion), implying that PGGM and DIF would each stump up EUR750 million (US$796 million). EQT bought a 70% stake in the water company in 2018 from BNP Paribas, which retains a minority stake.
Since then, Saur has centered its strategy on acquiring and adding value to 15 assets and engaging a deep transformation based on digital and technological innovation. Saur now has a global footprint with long-term contracts in France, Poland, Portugal, Spain, the UK, North America and Saudi Arabia, providing drinking water and wastewater services for more than 20 million people as well as operating an industrial water division.
PGGM acquired a 20% stake in Suez Water Resources, the US subsidiary of Saur’s commercial rival, Suez, in 2018. It has also possessed a 2% stake in the UK’s Thames Water since 2006.
Dennis van Alphen, the head of infrastructure at PGGM, said: "In today’s investment environment it is more and more important that pension capital is invested not just for financial return but to make an active contribution to society’s challenges.
"The envisaged investment in Saur is a seamless fit with that strategy, providing communities and companies across the world with access to clean water. We are excited to embark on this journey with our partner DIF Capital Partners and EQT Infrastructure."
The deal is the third major European acquisition in the utilities sector for the Dutch fund. In March, PGGM also teamed up with DIF Capital Partners, through its DIF Infrastructure VI fund (“DIF”), to jointly acquire Fudura, a B2B provider of medium-voltage electricity infrastructure (mainly transformers), metering devices and related data services in the Netherlands. Both PGGM and DIF are seeking to support Fudura in expanding services to companies seeking solutions for energy efficiency, security of energy supply and CO2 neutrality.
Also in March, PGGM led a consortium also including EDF to buy a 35% stake in Denmark’s largest telecommunications and energy group Norlys in what was hailed as one of Europe’s biggest ever fiber deals. The Norlys Tele fibernet covers 700,000 households with the goal to pass one million households by the end of 2023.