French utility Suez said Wednesday it had teamed up with a Canadian investment fund to buy General Electric unit GE Water, building an "unparalleled" new business at a time of worsening global water scarcity.

Suez and Caisse de depot et placement du Quebec (CDPQ) are putting 3.2 billion euros ($3.4 billion) on the table to pick up GE Water with a view to merging it with Suez's own industrial water business, the buyers said in a joint statement.

Suez is footing 70 percent of the bill and CDPQ the rest, they said.

"Long-term demand for water treatment equipment, chemicals and services are expected to remain strong both as a consequence of growing water scarcity and the impact of global warming on the water cycle," the statement said.

"Furthermore, there are increasing global concerns related to industrial wastewater and its impact on the environment which make advanced treatment of water an absolute necessity," it said.

Suez chief Jean-Louis Chaussade said the link-up would crease "an unparalleled industrial water platform".

Suez supplies drinking water to 92 million people worldwide and waste water treatment services to 65 million more but has been short on customers from industry.

GE said at the end of last year that it was looking to spin off its water business, which employs 7,500 people, as part of its pending merger with oil giant Baker Hughes.

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