UPDATE 1-Suez chairman rejects ‘mirage’ of Veolia offer plan | Reuters

Veolia’s offer to acquire a stake in fellow French waste and water management group Suez was based on an “industrial mirage” that would weaken Suez in France and overseas, according to Suez’ chairman in an interview with French newspaper JDD.

Veolia offered on Aug. 30 to buy a 29.9% stake in Suez from French gas and power utility Engie for 2.9 billion euros ($3.4 billion), and, if successful, to then launch a full takeover bid to create a “world champion of ecological transformation.”

Suez’s board and management have since rejected the offer and said the company was considering alternatives.

In the interview with JDD, Suez Chairman Philippe Varin called Veolia’s offer “very hostile” and said the plan to create a sole French sector leader would bring job losses in France and hurt efforts to win overseas tenders.

“If you scratch the surface a bit, under the veneer of a French global super-champion that is being held up to us, I see an industrial mirage,” Varin said.

He said Veolia’s proposal to sell on Suez’s French water business to infrastructure fund Meridiam raised “serious questions,” since Meridiam financed but did not operate projects.

Suez management was working on an alternative solution, Varin confirmed. He declined to give details but noted that the French government, which has a large stake in Engie, had been clear about the need for a French dimension to any plan.

French private equity firm Ardian told Reuters last week it was talking to both Suez and Veolia, while French Finance Minister Bruno Le Maire said he would meet soon with Suez.

Suez discussed the future of Engie’s stake in July with Engie Chairman Jean-Pierre Clamadieu, agreeing on the need for a consensus and to rediscuss the matter in early September, Varin told JDD.

Clamadieu has called Veoila’s offer too low but also said Suez should hurry up if it wants to present an alternative plan. ($1 = 0.8442 euros) (Reporting by Gus Trompiz Editing by Leslie Adler and Cynthia Osterman)

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