French power supplier Engie on Monday, October 5, agreed to sell a nearly 30% stake in waste and water group Suez to rival Veolia, setting up a new phase in one of the country’s most bitter takeover battles.
Suez, which provides municipal water services in countries around the world, has repeatedly tried to scupper any deal and considers Veolia a competitor maneuvering for a hostile takeover.
The French state, which owns 22% of Engie, said it had voted against the 3.4-billion-euro ($4-billion) bid “in the absence of an amicable agreement between the two companies Veolia and Suez.”
But Engie went forward with the sale, chairman Jean-Pierre Clamadieu told reporters, because while state shareholders have “an important voice, the board of directors must act in the interest of all shareholders.”
Engie’s board of directors “has taken note of the commitments made by Veolia and in particular its unconditional commitment not to file a hostile takeover bid following the acquisition of Engie’s stake in Suez,” the company said.
Veolia first announced its intention to bid for Engie’s 29.9% stake in its longtime rival in August. Last week, it upped its offer which was set to expire Monday night.
The group confirmed on Monday evening that it now intended to launch a full takeover bid for Suez, but said it would only be launched if Suez management agreed to the deal during a 6-month period of talks proposed to hammer out a friendly accord.
The company said late it hoped to resume talks with Suez directors on Tuesday, October 6.
But Suez has so far been trenchant in its opposition, last month calling the sale “destructive for France” and warning the deal threatened up to 10,000 jobs around the world.
Engie has been left with a holding of just over 2% in Suez, which it could sell later if Veolia makes a planned public offer for the remaining shares. – Rappler.com
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