France: Faced with Veolia's takeover offer, Suez wants to pamper its shareholders

Suez employees demonstrate at Engie's headquarters in La Défense on September 22, 2020. REUTERS / Charles Platiau

Text by: Pauline Gleize Follow

4 min

While Veolia is trying to get its hands on its competitor Suez, several hundred employees demonstrated Tuesday, September 22 in front of the Tour Engie, in La Défense, at the call of the Suez intersyndicale.

Reluctant to this proposal, the company embarks on the operation to seduce its shareholders to put all the chances in its side.


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Veolia has advanced its pawns


At the end of July, Engie, which owns Suez up to 32% of the capital,

announced that it wanted to refocus on energy and, after procrastinating for years, decided to sell its shares.


then proposed 2.9 billion euros for the purchase of 29.9% of the capital with the aim of then launching an operation to buy back the shares of the other shareholders and create " 

a French world super champion of ecological transformation

 " .

An amount deemed insufficient, for



For his part, Suez,

specialist in water treatment and recycling,

is against this takeover by its competitor

 : the company does not want to lose its " 



It would also, in fact, be split.

Because Veolia would sell the “water” activity to a French fund, Meridiam, so as not to endrefining anti-trust laws.

The honorary president of Engie and Suez, Gérard Mestrallet, does not want to hear about this offer and accuses Veolia of having launched a hostile operation aimed at destroying Suez.

Operation seduction

Suez has just launched an operation to seduce its shareholders.

The company made a commitment on Tuesday September 22 to double the value of its share for shareholders by 2022 and intends to accelerate the implementation of its strategic plan.

On the menu, a sale of 4 billion euros of assets from the start of 2021, more than two years ahead of what was planned.

Suez also promises to save 1.2 billion euros per year by 2023, against a billion previously.

In the meantime, Suez is dangling the payment of an exceptional dividend of at least one billion euros "as 

soon as possible

 " - no later than the first half of 2021.

Because for the moment, Suez does not really have an alternative to escape Veolia.

Summoned by Engie to find a solution, Suez started looking for investors.

A few have expressed interest, including the French Antin fund.


Many investors, especially funds, may be interested in this sector

, said Xavier Regnard, analyst at Bryan Garnier responding to AFP.

Overall, these activities offer good visibility, and historically, these companies have distributed good dividends


Tight schedule

But landing a solid offer takes time.

Investors must take a detailed look at financial data, assess the price they are willing to pay, among other things.

However, Suez has little time.

Veolia's offer runs until September 30 and Friday September 25, Engie's board of directors will meet to review the proposals on the table.

If Veolia has just opened the door to a new discussion of the price, its deputy general manager Estelle Brachlianoff does not wish to compromise on the tempo.

However, not all players want to follow this rhythm.

The government, for example, is now trying to procrastinate.

At first, Prime Minister Jean Castex considered that Veolia's proposal made sense from an industrial standpoint.

But last week, the Minister of the Economy Bruno Le Maire assured that the State, a reference shareholder of Engie, would refuse any haste.

This " 

because when there are tens of thousands of jobs that are at stake, we do not rush

", he argued.

The various players will have the opportunity to shed light on their strategy on Wednesday 23 September: the bosses of Suez, Veolia and Meridiam will then be heard by the deputies of the Finance and Economic Affairs committees.


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