French conglomerate Veolia and its rival Suez announced on Monday they had agreed preliminary terms of a merger to create a global champion in water services and waste management.

After months of waging a bitter battle in the media and the courts, Veolia finally won over Suez with an offer of €20.50 per share, up from its original offer of €18.

In a statement the companies said a shift of assets would create a Veolia with €37 billion in annual revenue to move forward with the company’s “plan to create a global champion of ecological transformation”.

The company wants to become a global leader in helping firms and cities reduce their environmental impact, including by recycling treating waste and reducing the use of resources.

The company wants to become a global leader in helping firms and cities reduce their environmental impact, including by recycling treating waste and reducing the use of resources

The battle between the two companies was primarily over what would happen to Suez in the tie-up.

The preliminary deal, which the two sides aim to finalise by next month, would create a new Suez that would include its solid waste and municipal water activities in France, plus water contracts in Italy, Africa, China and Australia.

The statement said the firm with €7 billion in annual revenue would be coherent and have real chances for growth.

The head of Suez’s work council, Franck Reinhold von Essen, said labour representatives had not been consulted on the terms of the preliminary deal but that the “new Suez doesn’t have the critical mass that would allow it to ensure jobs through growth”.

Veolia already bought 29.9 per cent of Suez’s capital in October, and the price announced on Monday values the company at around €13 billion.