USFilter Announces Agreement to Sell Its Surface Preparation Group Business.

Business Editors

PALM DESERT, Calif.--(BUSINESS WIRE)--July 23, 2003

United States Filter Corporation (USFilter), a subsidiary of Veolia Environnement (Paris Bourse: VIE and NYSE: VE), announced today that it has entered into an agreement to sell its surface preparation business to International Surface Preparation Corporation, a newly formed company jointly owned by Bard Group, LLC; The GlenRock Group, LLC; Atlantic Equity Partners III, LP; and Hunt Capital Growth Fund II, LP. The sale of the surface preparation business completes the company's previously announced plans to divest its non-core businesses by the end of 2003.

USFilter's surface preparation business manufactures and distributes surface preparation equipment, parts and consumables on a worldwide basis. Total annual sales in 2002 were approximately $320 million. The transaction is expected to close during the third quarter and is subject to normal regulatory approvals and satisfaction of customary conditions.

Total proceeds from the disposition of USFilter's surface preparation businesses, including the sale earlier this year of its Walther Trowal mass-finishing business, will be approximately $130 million.

In connection with the sale announced today, CIBC World Markets acted as financial advisor to USFilter. Sutherland Asbill & Brennan LLP acted as USFilter's legal advisor.

United States Filter Corporation, a Veolia Environnement company, is North America's leading water company providing comprehensive water and wastewater systems and services to commercial, industrial, municipal and residential customers. Veolia Environnement (Paris Bourse: VIE and NYSE:VE) is the largest environmental services company in the world with more than 295,000 employees, including FCC, in about 100 countries and annual revenues of more than $31.5 billion. Visit the company's web sites at www.usfilter.com or www.veoliaenvironnement.com.

Important Disclaimer. Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This press release contains "forward-looking statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risk that changes in energy prices and taxes may reduce Veolia Environnement's profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement's contracts, the risk that Veolia Environnement's compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, and the risks related to Veolia Environnement's relationship with Vivendi Universal, as well as the risks described in the documents Veolia Environnement has filed with the U.S. Securities and Exchange Commission. Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking statements. Investors and security holders may obtain a free copy of documents filed by Veolia Environnement with the U.S. Securities and Exchange Commission from Veolia Environnement.