Water utilities of the two largest cities in Greece may merge. Athens Water Supply & Sewage Co. (EYDAP) and Thessaloniki Water Supply & Sewage Co. (EYATH) may become one company after efforts for their privatization were halted by legal obstacles and local opposition.
According to a government official, the merger would create a company with a market value of almost 1.4 billion dollars that would be able to attract capital and carry out larger investments. However, the official said that no final decision has been made yet.
The move follows a Greek constitutional court ruling in May that canceled the transfer of the government’s stake in EYDAP to the Hellenic Republic Asset Development Fund (HRADF), deeming it “unconstitutional.” An unofficial referendum in Thessaloniki and 10 municipalities on May 18 showed that locals were opposing to the sale of EYATH, forcing HRADF to review its plans.
The merger would create synergies and is part of the government’s plan for managing water supply and infrastructure in Greece, the government official said. He also noted that EYDAP’s know-how and personnel will help EYATH carry out infrastructure projects.
The Greek state is the biggest shareholder in both water companies while Paulson & Co. bought a 9.9% stake in EYDAP in May. EYDAP has a market value of 914 million euros ($1.2 billion) and EYATH almost 152 million euros.