French competitor with ties to Flint crisis seeks to buy parent of Boise’s water company

·4 min read

A decision by the European Union could determine the future of drinking water supplied to Boise residents.

Veolia Environment, one of the world’s largest water companies, plans to take over Suez, the Treasure Valley’s largest water supplier, with 130 employees and 240,000 customers in Boise and Ada County.

Both companies are based in France, and the merger requires approval from the European Union’s competition authority, which is evaluating antitrust concerns. The European Commission will take up the matter at a Dec. 14 meeting where the two companies expect to obtain approval. The sale could be completed by the end of the year.

To allay concerns, the two companies have proposed to create a “New Suez” company that would be spun off to retain control over Veolia’s French operations and activities in Australia, Italy, India and the Czech Republic.

Further concessions could be imposed to obtain approval, Reuters reported. About 40% of the combined company would be sold to a group of investors in France and the United States to create New Suez, which would have estimated annual revenue of $7.9 billion, Bloomberg reported.

Suez manager Janet Kreller gives a tour through the company’s Marden Street Water Treatment Plant off Warm Springs Avenue in Boise. It has eight filters — “like giant Brita filters” — that can clean up to 17 million gallons of water per day.
Suez manager Janet Kreller gives a tour through the company’s Marden Street Water Treatment Plant off Warm Springs Avenue in Boise. It has eight filters — “like giant Brita filters” — that can clean up to 17 million gallons of water per day.

Veolia and Suez, rivals since the 19th century, announced in April agreement on a $15.4 billion merger. Veolia, which already owns 30% of Suez, would gain holdings in the U.S., Latin America, Australia and Asia. Annual revenue would be about $41.9 billion.

The combined company, they said, would be better suited to fight off new global challengers emerging from China. It would also strengthen their position to compete in recycling and environmental services, two growth areas. Besides supplying and treating water, Veolia also handles trash and hazardous waste.

Suez bought the parent company of United Water Idaho in 2000. It was the successor to a company that began serving Boise in 1890. Suez operates 1,400 miles of underground water mains across the Treasure Valley.

Most of the water comes from the ground from 79 wells Suez operates. During peak summer months, water is also drawn from Suez’s two water treatment plants, which pull water from the Boise River.

Suez is working to buy the Eagle Water Co., which serves 12,000 customers in Eagle and areas outside the city. That sale must be approved by the Idaho Public Utilities Commission, and the company “anticipates them making a decision very soon,” Suez Boise spokesperson Madeline Wyatt said by email.

Wyatt said she could not comment on the merger. Richard Henning, a spokesperson in Suez North America’s headquarters in Paramus, New Jersey, said that until the European Union makes its decision, it’s unclear when the merger could be finalized.

“We believe these are two of the finest water companies in the world,” he said by phone. “They represent the No. 1 choice of cities and municipalities throughout the United States. We believe the impact of these companies coming together will be exceptional for our customers.”

In Flint, Michigan, Veolia was sued as part of the drinking water crisis caused when the city switched the source its drinking water from Lake Huron to the Flint River in 2014. Corrosive water caused lead to leach from pipes, joints and fixtures. The discolored, tainted water led to a spike in toxic lead levels in the blood of children and other residents.

Veolia was hired to analyze Flint’s water in 2015, after the water source changed but before the toxic effects were learned. At the same time, the company was seeking lucrative additional contracts with the city.

Internal emails from Veolia executives allegedly showed that senior officials knew that families in Flint were at risk of being poisoned by tap water months before the city acknowledged the problem. Veolia and a city contractor argued that city officials should have been told to change the water supply to protect residents. The company reportedly never made the recommendation public.

The Michigan attorney general sued the company in 2016. Claims of professional negligence, negligence, public nuisance and fraud were later dismissed, leaving only a claim of unjust enrichment.

Last month, a federal judge approved a $626 million settlement of claims by Flint residents against the state of Michigan, the city of Flint and other defendants. Veolia declined to take part in the settlement, which would have relieved it of further responsibility. A separate lawsuit against the company is pending.

Veiolia denies it did anything wrong and claims state and local officials were aware by early 2015 of a potential lead problem.

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