U.S. Filter Accepts Vivendi’s $6.2-Billion Acquisition Bid

U.S. Filter Corp., the world’s leading water and waste-water treatment firm, confirmed Monday that it has reached an agreement to be acquired by the French utility Vivendi for about $6.2 billion in cash.

If completed, the deal would be the biggest acquisition yet by Vivendi, giving it the world’s largest water business and a strong presence in the lucrative U.S. market.

Founded in 1990, Palm Desert-based U.S. Filter has become a world leader by acquiring more than 150 companies--including well-known Culligan Water Technologies last year. U.S. Filter, which builds and operates water treatment plants for cities and private firms, has about 27,000 employees and manufacturing plants in 94 countries. No layoffs are planned.

“This combination is 100% fitting,” said Jean-Marie Messier, chairman of Vivendi. “We are adding our respective strengths to compete in what is a global business. Clients are looking for one-stop shopping, full-service delivery.”

Under the deal terms, U.S. Filter would become a wholly owned subsidiary of Vivendi, giving the combined company more than $12 billion in annual revenue.

“We think we can jump-start growth at both of the companies,” said U.S. Filter Chairman Richard Heckmann, who has agreed to remain with the combined firm for at least four years. He and Messier met 10 years ago, though discussions on a possible deal began in January.

Vivendi, based in Paris, is offering $31.50 for each share of U.S. Filter stock and would assume $1.7 billion in debt.

While the offer is 26% higher than U.S. Filter’s closing price of $25 a share last Tuesday--the day before takeover speculation sent the stock soaring 20%--it is just $1 a share higher than Friday’s closing stock price.

Active trading of the firm’s options last week has prompted a review by the Chicago Board Options Exchange, described as “routine.”

On Monday, U.S. Filter shares fell 13 cents to $30.38 in New York Stock Exchange trading. But the stock still is far below its record high of $43.75 reached in October 1997.

The acquisition is still subject to regulatory approval in the U.S. and Europe, but is expected to close before this summer.

Times wire services were used in compiling this report.

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A Bargain for Vivendi?

U.S. Filter shares have rebounded from their lows of last year, but Vivendi’s takeover offer of $31.50 a share is still well below the stock’s peak price in 1997. Monthly closes and latest on the New York Stock Exchange:

Monday: $30.38

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Source: Bloomberg News