Continuously serving Kosciusko County since 1854
Warsaw water customers will have a new service provider if an agreement announced Monday meets with the approval of company shareholders and state regulators.
In a nationwide teleconference Monday morning, United Water Resources chairman and chief executive officer Donald Correll, and Philippe Brogniart, executive vice president of Suez Lyonnaise des Eaux, announced the acquisition of United by the French firm for $32.5 million in cash.
"We at United Water have known and worked with Suez for many years and have worked with them for the last five years," Correll said. "This transaction represents a tremendous opportunity for our company, our shareholders, our customers and our employees."
Correll, who will remain chairman and CEO of United Water Resources, said the acquisition is the logical extension of a relationship established in 1994, when Suez bought a minority interest in United during the latter's purchase of Columbia Water Works in New Jersey. At that time, Suez was limited to purchasing no more than a 30.1 percent share in United.
In 1997, the two companies formed a joint venture, United Water Services, which has successfully competed for 35 municipal water and waste water treatment contracts in 16 states, including projects in Indianapolis and Gary.
Correll added the municipalities, industries and customers of United Water will benefit from the experience Suez brings to the merger. The international firm currently serves 77 million water customers and 52 million waste water customers worldwide.
"Like United Water, Suez sees a tremendous area for growth in the provision of water and waste water services to municipalities and industry," Correll said. "Suez shares our goal to grow this company and our shareholders and employees will benefit from that growth."
Under the terms of the agreement, United Water stockholders as of Aug. 12 will receive $35.48 per share of United stock, which represents a 54 percent premium to United's stock price of $23.06 on Aug. 12, Correll said.
The merger will allow United Water to draw upon the larger resources and experience available from Suez Lyonnaise des Eaux to possibly become the largest privately-owned water provider in the United States, Brogniart said.
"We are very pleased to have reached an agreement to acquire 100 percent of United Water Services," he said. "Our partnership has proven to be very successful in winning public-private partnerships.
"This will help United Water become the premier provider of water in the United States," Brogniart added.
Correll said at worst, the merger would have no impact on water rates, and could actually result in lower rates for its 7.5 million water customers.
"I think the price being paid on this should have no impact on rates. Moreover, I would expect, given the opportunities being created, our ability to work for future consolidations could actually benefit our customers as well," he said. "As we continue to increase our investments in our various systems, we may be seeking a raise in our regulated rates. But those increases wouldn't be a direct result of this acquisition."
Correll added he expects regulatory approvals should be obtained by the end of the first half of 2000.
