The Water Multinationals

Today, there is a global industry that specializes in the privatization
of water services. It is dominated by two titans, Vivendi Universal and
Suez [formerly Suez Lyonnaise des Eaux], both based in France. Often
labeled the General Motors and Ford Motor companies of the global water
industry, Vivendi and Suez have monopoly control over approximately 70
percent of the existing world water service market.

While Vivendi is the larger of the two companies, posting bigger annual
sales than its rival mainly because of its diverse operations that
include communication and media interests, Suez provides water services
on a for-profit basis to more people around the world. Vivendi’s
latest wild buying spree in a bid to become the No. 1 communications
giant in the world, has racked up a massive debt load and undercut its
water operations, which have been the company’s best revenue
generator. Indeed, Vivendi’s strategy of cross subsidizing its
dot.com speculative ventures with profits from its water operations
failed, thereby forcing its CEO to resign.

In 2001, Vivendi and Suez were ranked #51 and #99 respectively on the
Global Fortune 500. Their monopoly, however, may soon be challenged by
RWE, a German electricity and waste management company, ranked #53 by
Global Fortune. After purchasing two key water companies, Thames Water
in the U.K. and American Water Works in the U.S., RWE has positioned
itself to expand its market share in the coming years.

Two other key players in the privatization of water services are the
French company Bouygues (through its water company SAUR) and the U.S.
construction giant Bechtel (through its subsidiary United Utilities).
The field is rounded out by a string of smaller British water companies
such as Severn Trent, Anglian Water and the Kelda Group.