Veolia, Suez Said to Be Holding Talks Mediated by French State

The French Finance Ministry is unofficially mediating talks between Veolia Environnement SA and Suez SA, seeking a resolution to the utilities’ bitter takeover battle, said people with knowledge of the discussions.

The outcome of the negotiations is uncertain, and both sides’ positions haven’t really moved, the people said, asking not to be named because the information is confidential. Veolia remains adamant that it wants a full takeover of Suez, which insists it must exist independently after any deal, they said.

The talks really got going two weeks ago, after French private equity firm Ardian SAS signaled it wouldn’t play the role of a white knight by offering Suez an alternative to Veolia’s proposal, one of the people said. Ardian President Dominique Senequier told the French Senate in Paris that she wouldn’t make a counteroffer for Suez unless there’s a friendly solution to the standoff with Veolia.

An official from the French Finance Ministry declined to comment on any talks between Suez and Veolia, but said the ministry still favors parliamentary mediation. Several French MPs have offered to foster friendly talks between the two companies.

Veolia already owns nearly 30% of Suez, after buying the stake from energy group Engie SA for 3.4 billion euros ($4.1 billion) in October. It intends to combine the companies into a global giant in waste and water services. After months of being rebuffed by Suez’s management, Veolia announced a hostile takeover offer earlier this month.

As the two utilities have sparred in the media, the boardroom and the courts, the French government has repeatedly called for an end to the deadlock and friendly talks.

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