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Suez warns 'hostile' Veolia bid could cost up to 10,000 jobs

·2-min read
Veolia says it wants to keep its bid sweet, not hostile -- but Suez remainds steadfastly opposed
Veolia says it wants to keep its bid sweet, not hostile -- but Suez remainds steadfastly opposed

French water, waste and energy giant Suez has reaffirmed its opposition to a "hostile" bid for a stake in the company by corporate rival Veolia, warning the deal threatened up to 10,000 jobs around the world.

Veolia is attempting to buy a crucial 29.9 percent stake in the firm held by power company Engie, which is backing the move.

But Suez has been trenchant in its opposition to the bid and its board made clear on Sunday that it still considered its competitor to be manoeuvring for a possible hostile takeover.

Suez chief operating officer Jean-Marc Boursier told journalists his company had come up with its estimates of job losses in 2012 when the two companies had discussed plans for closer collaboration. Up to 5,000 of the forecast lost jobs would be in France, he added.

In a brief letter to Veolia issued Sunday, the board of Suez made clear that it was still opposed to its purchase of the Engie stake.

"I must inform you, to our regret, that the board of Suez considers that the proposal... remains hostile," Suez chair Philippe Varin wrote to Veolia director-general Antoine Frerot.

The statement followed a public pledge by Veolia earlier in the day not to launch a hostile bid.

"Any public bid capital bid for Suez will require a favourable response from Suez's board," it said in a statement.

Engie has likewise said it required the support of the Suez board before it will put up its 29.9 percent Suez stake.

Veolia announced its intention to bid for its longtime rival in August. Last week, it upped its bid for Engie's stake to 3.4 billion euros ($4 billion), with the new offer on the table until Monday night.

In order to get a deal over the line, Veolia had further expressed willingness to agree to a Suez demand to asset disposals of "around 5 billion euros" of international water service interests, including those of Suez in France.

If a deal does ultimately go through, it could be the catalyst for a full takeover of Suez, which provides municipal water services in many countries around the world.

But there seemed little sign that Suez would bend as it sought to "conserve in France a second player with global reach" in water and waste services, Varin wrote in his response to Veolia CEO Antoine Frerot and released to the media.

evs/soe/cdw/gle/qan