French govt warns Veolia/Suez merger 'won't work' without talks
published : 6 Oct 2020 at 15:45
PARIS - Finance Minister Bruno Le Maire warned Tuesday that a takeover raid by French energy and water giant Veolia against its rival Suez risked destabilising both firms unless an amicable accord could be reached.
Veolia closed in on its target Monday after securing a deal to buy 30 percent of Suez from Engie, an energy player in which the French state owns a 22 percent stake.
Despite voting against the sale, the French government was overruled by Engie's board, which agreed to pocket Veolia's offer of 3.4 billion euros ($4 billion).
Veolia is now poised to launch a full takeover, potentially creating a global giant supplying power generation, waste management and water services to municipalities worldwide.
French officials are eyeing the deal warily, despite pledges by Veolia to maintain jobs in the strategic sectors.
Suez's board on Tuesday denounced a "hostile" deal made under "unprecedented and irregular conditions."
"I don't believe in forced marriages. I don't think they work," Le Maire told France Info radio, urging talks to resume between the two sides quickly.
"The deal won't work" without an accord, he added. "We were just a few centimetres from a deal but we ran up against intransigence on one side and hastiness on the other."
Veolia has said it will give itself six months to find common ground with Suez and allay its fears of a break-up that it says could cost up to 10,000 jobs.
Suez has already taken a series of "poison pill" moves to try to scupper any takeover, including by placing its key French water services business in an independent Dutch holding.
That could put it out of reach for Veolia, which has said it wants to sell the French operations to meet antitrust concerns.
Suez said Tuesday that "it will use all the means at its disposal... to avoid a creeping takeover or de facto control," it said.