Agreement reached to sell Veolia’s regulated water business in the UK

First significant step of the €5 billion asset divestment program before end 2013
Net debt reduction of € 1.450bn

Paris, 28 June 2012. Today, Veolia Environnement’s wholly owned subsidiary, Veolia Water UK PLC, has agreed to sell the UK regulated water activities of Veolia Environnement to Rift Acquisitions Limited(a) for a total transaction value of £1,236 million(b).

 
Following completion of this transaction, Veolia Environnement’s net debt will be reduced by around £1,165million(c)  (€1,450(d)million) as a consequence of the sale. Veolia Environnement will retain, in addition to its non regulated water business, an interest in the UK regulated water business through Veolia Water UK’s retained 10% equity interest in the divested business for a period of at least 5 years.

Antoine Frerot, Chairman and Chief Executive Officer of Veolia Environnement, added: “This first significant divestment shows that we are moving in the right direction regarding the implementation of our strategic plan and that the transformation of Veolia is progressing at a good pace.”

 
The sale is not subject to any precedent condition and is expected to be finalised today. This divestiture is the first significant step of the €5 billion asset divestment program before end 2013, announced by Veolia Environnement during its Investor Day, on December 6, 2011. The divested assets’ adjusted operating cash flow and adjusted operating income for 2011 were respectively £105.5 million and £74.9 million.

 
(a) Rift Acquisitions Limited is an acquisition entity formed by Infracapital Partners, the infrastructure investment fund managed by M&G (the European investment arm of Prudential plc) and Morgan Stanley Infrastructure Partners.
(b) On a regulated asset base of £948m at March 31, 2012
(c) Before transaction fees
(d) GBP:EUR of 1:1.246
(e) €122 million and €86 million (at 2011 average exchange rate)