Sale of Engie's Suez shares to Veolia remains suspended

The appeals court ruling could further delay
Veolia's plans to acquire all of Suez's shares
19.11.2020 − 

Veolia's planned purchase of a major stake in competitor Suez remains on hold to allow Suez’s employees to be properly informed and consulted. On Thursday morning, the Paris Court of Appeal upheld the temporary injunction on the sale ordered by a lower court in early October. In its statement following the verdict, Veolia said that Suez had begun the information and consultation process with the works councils on 3, 4 and 5 November. As a result, Veolia said that "it will recover all its rights" with respect to the purchase no later than 5 February 2021.

Suez rejected this representation, stating that “contrary to the information provided in the press release of Veolia, the starting point for the consultation period is not determined, and the date of February 5 mentioned by Veolia is incorrect“. Suez also maintained that in any event, Veolia would "remain deprived of its voting rights upon completion of the information and consultation process until the end of the transaction’s review by the European antitrust authority, unless authorized by the latter".

The Suez group's Economic and Social Committees representing the concern's employees had sought injunctive relief after Engie, then Suez's largest shareholder, had sold 29.9 per cent of Suez's shares to Veolia for €3.4bn. The court of first instance issued a temporary injunction suspending the "effects resulting from the transaction", without voiding the sale as such. Following today’s judgment, the five trade unions which represent employees of Suez France called on Veolia to present its plans for the group to the French employee representative bodies and the Suez European Works Council.

Once the acquisition of the Engie block of shares is completed, Veolia intends to achieve a full takeover of Suez by purchasing the remainder of the company's shares via a public offer. For its part, Suez's board of directors continues to do everything in its power to block a merger, and had, prior to the purchase of Engie's shareholding, created a "poison pill" which it hopes will create anti-trust difficulties for Veolia. As a countermeasure, Veolia is working to oust Suez's board members and has publically called on the concern's shareholders to request the convening of a general meeting.

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