Antoine Frérot, the victor in Veolia’s bitter battle for Suez

Only days after Veolia finally sealed a deal to buy arch-rival Suez, Antoine Frérot feels relaxed enough to describe himself in Machiavellian terms. 

“Machiavelli said that he who wants the end, accepts the means . . . I am rational like Machiavelli,” the Veolia boss told the Financial Times. 

But wry comments aside, Frérot dismisses suggestions — both from around Suez and more broadly in Paris — that he was too aggressive in the fight for his company’s water and waste competitor.

“There wasn’t a question of morality in what happened. There were just two incompatible objectives,” he said. “Faced with deviousness . . . I am straightforward. I hit back with what I call firmness, not violence.”

The battle ended in a very Parisian way: in the top-end Bristol hotel after a three-star chef had provided room service.

Across the table from Frérot was Philippe Varin, Suez chair and elder statesman. Alongside them was a board member from each side, a court-appointed observer and Gérard Mestrallet, the former Suez boss who had been called in to mediate. 

The French state, which had already tried and failed to end the fight, was not present. According to people familiar with the matter, Frérot insisted Suez chief executive Bertrand Camus not be in the room. 

The two CEOs had barely spoken since October, when Veolia bought 29.9 per cent of Suez from French energy group Engie and pledged to snap up the rest. Suez fought back, with Camus fierce in his fight to stay independent. 

Despite promises to convince the board of Suez, a hostile bid was finally launched in February and Veolia piled pressure on its target. Board members were threatened with criminal lawsuits. And a deal was only announced this week as pressure mounted on both sides.

When it comes to big changes . . . you have 20% of people who agree and want to go for it, 20% who are against it and want to slow you down. And there are 60% waiting to see who will win

Last Sunday, after long negotiations, Suez agreed to be bought by Veolia, which raised its price from €18 to €20.50 a share. Veolia said it would sell back a chunk of Suez, including assets that would have been sold to get past competition regulators, to create a smaller competitor. Legal threats are to be stood down. Shareholders on both sides are happy.

The price, Frérot told the FT, was “very close to the ceiling” of what they were prepared to pay. He also stressed that the governance of the new Suez was critical because if it “falls apart in a few years, I will be held responsible”, and that he had insisted on management pay limits at the new Suez and lockups before assets could be sold. 

Varin and Frérot decided to split 80 per cent of the capital of the new Suez between private equity groups allied to both sides. Ardian, which was aligned with Suez and wants control of the new group, is not happy, say people briefed on the matter. 

For 62-year-old Frérot the deal, which has been in the back of his mind for years, is a chance to create the “champion of the ecological transition” by combining the world’s two largest water and waste groups. 

Suez and Veolia, each with long histories, had come close before. In 2012 Suez tried to snap up Veolia three years into Frérot’s tenure. 

Coming out of the financial crisis, Frérot had to reduce debt and change strategy, earning the enmity of Henri Proglio, who had appointed him. The lessons he learnt facing down boardroom challenges have been put to use.

“When it comes to big changes . . . you have 20 per cent of people who agree and want to go for it, 20 per cent of people who are against it and want to slow you down. And there are 60 per cent waiting to see who will win,” he said. “It is therefore necessary, unfortunately, to get rid of the 20 per cent pulling the brakes and convince the 60.” 

If competition hurdles are cleared, Frérot will lead a group with €37bn in revenues from his office in a northern suburb of Paris. It is a far cry from when his father, a country doctor, “took a gamble” sending the 15-year-old Frérot to school at the famous Lycée Louis-le-Grand in Paris. 

From there he followed a well-trodden path of the French elite, through France’s École Polytechnique, an engineering college that churns out top executives.

Divorced and father to three daughters, Frérot now lives in the wealthy 3rd arrondissement but stands somewhat outside the Parisian set.

A private man, he resists sharing too much of himself in the office, not wanting his decisions to be influenced by personal factors. That means, according to one former colleague, he has depths most do not get to see. 

A student of philosophy and sociology, he re-read a biography of Claude Lévi-Strauss during his war with Suez. He smokes Craven cigarettes and collects “outsider art”. The first time he bought a painting was when he was on military service in Germany for 100 Deutschmarks.

Another former colleague said Frérot had “a long memory” and “does not forgive easily”. But he may need to show a different side to himself as he looks to integrate a bruised Suez. A man who has vocally supported a more inclusive form of capitalism must shrug off accusations he went too far. 

“Opinion on Frérot is going to stay divided,” said one banker advising Suez. “He was a good battlefield general, he told people to go out and kill, and they did it. But is violence the best way to get a good outcome? Integrating these companies is not going to be easy.”

But Frérot backs himself to bring the groups together and has one eye on his legacy. More so, his bet is that “if you don’t change your goal, people end up believing you.”