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Global waste treatment giant in the wings

Veolia’s successful bid for Suez shares from Engie SA earlier this month has created an environment for what global WARR industry observers claim maybe a long and hostile corporate battle for full control.

Suez initially repelled Veolia when it made its initial approach in August and has told French business markets that it will do all it can to avoid a “creeping takeover”. Meanwhile, the French government which owns more than a fifth of Engie, voted against the sale of the Suez holding and has called for both companies to reach an agreement.

Once it has completed the 3.4 billion-euro ($4 billion) purchase of Engie’s Suez stake, Veolia has indicated it will file a public tender offer at 18 euros a share for the rest, after receiving regulatory consent, which could take as long as 18 months.

Veolia insists the public offer will only proceed once it’s been favourably received by Suez’s board — possibly after its general shareholder meeting.

Australian impact

A full takeover would create a global giant in waste treatment and environmental services and which would inevitably impact both businesses in Australia. However, Suez remains fiercely opposed to what it calls Veolia’s “hostile” approach and has stated that it would use all the means at its disposal to protect stakeholders’ interests.

The companies tried and failed to cement a deal in 2012, but the unofficial talks foundered on a number of issues including operational disputes.