Cleanaway Waste Management Ltd (ASX: CWY) shares are slipping in morning trade today. At the time of writing, the Cleanaway share price is trading 3.02% lower at $2.25.
It's been two weeks of wrangling for Cleanaway since the S&P/ASX 200 Index (ASX: XJO) listed waste management company announced its intentions to buy the Australian arm of France's Suez SA. The deal was reportedly worth around $2 billion.
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Legal rumblings over Cleanaway's Suez acquisition plans
But in news dragging on the Cleanaway share price, the acquisition didn't sit well with Veolia Environnement, which already owns 29.9% of Suez SA shares. Veolia is attempting to take over Suez with an 11.3 billion euro ($17.5 billion) bid, which would include the company's Australian operations.
According to IBISWorld data, Cleanaway manages 22.7% of Australia's waste treatment and disposal, while number two player Suez Australia controls around 18.3% of that market.
Only five days after Cleanaway's acquisition announcement, on 9 March Veolia issued a legal warning over the takeover move. Apparently, the threat didn't deter Cleanaway, and now Veolia has followed through.
Veolia launches lawsuit, naming Cleanaway
According to last night's press release, Veolia has moved forward with legal action in France to stop the sale of Suez's assets in Australia and the United Kingdom. The hearing is scheduled for 6 April.
Aside from Cleanaway Waste Management, the following companies are listed as defendants in the Veolia lawsuit: Suez SA, Suez Australia Holding Pty Ltd, Suez UK Group Holdings Ltd, I Squared Capital Advisors (US) LLC, I Squared Capital Advisors (US), and I Squared Capital Advisors (UK Parent) Limited, PLC.
According to the press release, Richard Kirkman, Veolia Australia Managing Director and CEO, said: "Any attempt by Suez to transfer strategic assets would be regarded as hostile to Veolia and contrary to the best corporate and competitive interests of Suez, its shareholders, employees and the market".
The wrangling continues.
Cleanaway share price snapshot
Cleanaway shares have gained around 36% over the past 12 months, just slightly below the gains posted by the ASX 200.
So far in 2021, the Cleanaway share price is down by around 3.8%.
Cleanaway pays an annual dividend yield of 1.9%, fully franked. Based on the current Cleanaway share price, the company has a market capitalisation of around $4.77 billion.
