Econostrum | Economic News in the Mediterranean

The Suez group is worried about its competitor Veolia's entry into its capital

Written by Frédéric Dubessy on Tuesday, September 1st 2020 à 18:50 | Read 268 times

FRANCE. Veolia's announcement, on Monday, August 31, 2020, that it would take over Engie's 29.9% stake in Suez from Engie, goes very badly for Suez.

Initially, the French group specialized in water and waste management had published a terse press release stating that "Veolia's approach was not solicited and was not discussed with Suez". Before, a few hours later, it called a meeting of its Board of Directors and took a firmer stance in its second press release. "In a context where environmental urgency is key to the future of our fellow citizens, Veolia's offer raises concerns about the future of water treatment and distribution activities in France and about employment in relation to the amount of synergies expected," the text states. "The proposed strategy would generate disynergies and loss of opportunity in France and internationally. In addition, the complexity of the chosen process would lead to two years of operational disruption, at a time when, in the post-Covid context, the teams are focused on implementing their strategic plan," the text stresses.

The board of directors of Engie will examine Veolia's offer in September 2020. Antoine Frérot, CEO of Veolia, says he is "100% sure" that the operation will go ahead and that the merger "goes down in history. He urged the Suez teams to join his project.

Veolia - which, after taking 29.9% of the shares, intends to increase its stake to 100% - intends to create a French champion in the water, waste and energy services sectors, a market estimated at €1,168 billion.



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