‘La Debacle’: Veolia gambles on Suez shareholder showdown


In war, the fiercest fighting often comes just before the end. So it’s in Veolia’s takeover battle with French waste-to-water rival Suez.

Both companies have been at loggerheads since the latter rejected an indicative 18 euros per share bid this past year.

Veolia CEO Antoine Frerot’s offer to ensure all French Suez jobs may allow him to outflank rival Bertrand Camus.

Veolia’s latest strategic gambit was made to neutralize French politicians and unions worried about job losses because of the offer. The 13 billion euro group already intended to sell Suez’s French water unit to Meridiam.

The thing would have some 5 billion euros in revenue, equal to nearly one-third of Suez’s group 2020 sales.
Frerot hopes the new deal will blunt Camus’s criticism that Suez’s takeover will result in a breakup and heavy job losses.

It also ought to mollify the French state, which last year opposed French utility Engie’s decision to sell its 30% stake in Suez to Veolia. Camus may, therefore, soon run out of defensive manoeuvres.

His plan to invoke a poison pill to block an unwanted takeover may precipitate a shareholder rebellion at Suez’s next annual meeting. Suez seems to realize that its scorched-earth defence is no longer viable.

Before this week, Chairman Philippe Varin publicly urged Veolia to raise its offer, suggesting the company is ready to haggle over price.

However, if dangers of disposals are a gambit to force Frerot’s hand to come to the table with a higher bid, they may work.