The die is cast: Engie will sell a large part of its stake in Suez to Veolia. The French utility's board of directors decided last night to accept the offer of around €3.4bn for 29.9 per cent of Suez's shares. With the sale, Engie reported that it would generate a pre-tax capital gain of €1.8bn.
The decision had been taken based not only on the price offered by Veolia, but also the commitments it had made, Engie added. The utility specifically noted Veolia's unconditional commitment not to file a hostile takeover bid once it has acquired Engie's stake in Suez.
Veolia welcomed Engie's decision and confirmed its intention to take full control of Suez via a voluntary public offer for its competitor's outstanding shares. Veolia plans to offer €18 in cash per share, but reserves the right to adjust the price if there are significant events affecting Suez in the intervening time.
However, Suez continues to consider Veolia's actions as hostile moves. Suez stated on Tuesday morning that the group "takes note of the purchase by Veolia of 29.9 per cent of its capital in a hostile manner and under unprecedented and irregular conditions". Suez added that it will "use all the means at its disposal to protect the interests of its employees, its clients and all its stakeholders, in particular to ensure equal and fair treatment of all its shareholders and avoid a creeping takeover or de facto control".