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Suez rejects Veolia's new proposals deemed still contrary to the social interest of the group



           


Suez refuses to fall into the trap of its competitor Veolia (photo : DR)
Suez refuses to fall into the trap of its competitor Veolia (photo : DR)
FRANCE. In a press release, Suez qualifies as "vague" the proposals made by Veolia to increase its capital. According to its Board of Directors, meeting on the morning of Wednesday 30 September 2020, "they do not guarantee the interests of shareholders and stakeholders that the Board is charged with defending".

A few hours before, Veolia (€27.19 billion in revenues in 2019) improved at the last moment its offer to Engie (€60.1 billion in revenues) for the shares of Suez raising it to €3.4 billion against €2.9 billion. At the end of August 2020, Veolia had set Wednesday 30 September 2020 at midnight as the deadline for this proposal. At the same time, the latter is reaching out to Suez and would like to open a six-month period of discussions "to seek the common bases for an agreement". During this time, Veolia undertakes not to make "a public offer for 70.1% of the capital of Suez unless it is friendly".

Suez says it wants to put "all means at its disposal to avoid a creeping takeover or de facto control by its main competitor". Its Board of Directors is counting on the "Board of Engie and its shareholders not to decide on the future of Suez under the conditions and timetable dictated by Veolia".

Suez wants to remain independent

"I call on each of the three parties to show a sense of responsibility and to take a step in the direction of the other", commented, on Wednesday 29 September 2020 on LCI, Bruno Le Maire, French Minister of the Economy. The French State is the largest shareholder of Engie with 23.6% of the shares.

Engie's Board of Directors is meeting this Wednesday afternoon 30 September 2020 to study the new proposal from Suez. At the time of closing, no decision had been communicated.

Veolia stated at the end of August 2020 that it was seeking 29.9% of the 32% of Suez's shares (€18.01bn turnover in 2019) held by Engie with the ambition of taking over the entire company specialised in water and waste management.
As Suez was quick to disapprove of its competitor's entry into its capital, it is now threatening to launch a takeover bid. For his part, the CEO of Engie has since raised the bidding (with success) while Suez signed a memorandum of understanding with the German company PreZero to divest itself of its recycling and recovery activities.

On 22 September 2020, Suez counter-attacked by announcing the acceleration of its 2030 plan and its desire to double shareholder value by 2022. Its Chief Executive Officer, Bertrand Camus, then highlighted his "priorities to invest in value-added services to promote the growth of Suez in order to be the independent, agile and dedicated leader in environmental services".

The trade unions of Suez, who have summoned Engie in summary proceedings, estimate the social cost of the arrival of Veolia in the capital of their group at "more than 10,000 job cuts, including 4,000 to 5,000 in France".


Frédéric Dubessy


Wednesday, September 30th 2020



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