EDF, Veolia Agree On Terms Of Dalkia Split

(RTTNews) - French electric utility EDF Group SA (EDFEF.PK) and water utility Veolia Environnement SA (VE) Tuesday announced the finalization of the discussions initiated in October 2013, on their joint subsidiary Dalkia, a provider of energy services.

The agreement was signed following completion of the employee representatives consultation process and the approval of the boards of directors of both EDF and Veolia. It is in line with the principles announced on October 28, 2013.

This transaction will result in the acquisition by EDF of all of the Dalkia group's activities in France. Dalkia International's activities will be taken over by Veolia.

The companies had said last year that Veolia would make a cash payment of 550 million euros to EDF to compensate for the difference in value between the stakes owned by the two shareholders in the various entities of the Dalkia group.

The transaction is expected to be neutral for the net financial debt of Veolia, which currently provides most of the Dalkia group financing. For EDF, this deal would improve its net debt/EBITDA ratio.

Completion of the transaction remains is dependent on the approval of the relevant competition authorities.

EDF slid 0.2 percent on Tuesday to close at 28.08 euros. Veolia added 1.3 percent to settle at 14.52 euros.