By Olivia Bugault
Suez SA's board of directors announced late Wednesday measures that aim to prevent a potential sale of its water subsidiary Suez Eau France, as the company tries to counter a takeover from Veolia Environnement SA.
The board of French utility Suez said that it has created a foundation whose mission is to preserve the integrity of its French water activities.
"For the next four years and unless otherwise decided by the board of directors of Suez during this period, Suez Eau France, as well as its assets, will be non-transferable in the absence of a prior approval of the Suez Eau France shareholders under certain conditions, and in any case, the foundation's prior approval," it said.
Veolia announced in late August its intention to buy a 29.9% stake in Suez from energy company Engie SA for 2.91 billion euros ($3.39 billion), which would be a first step before taking full control of its rival.
In order to increase Veolia's chances to get its move approved by antitrust authorities, Veolia previously said that it would sell Suez Eau de France to French asset manager Meridiam.
Suez rejected the unsolicited offer.
"The board of directors believes, in the context of Veolia's hostile project, that a potential transfer of Suez Eau France would be against the company's purpose and the corporate interest of Suez, as well as against the interest of its stakeholders and particularly its employees," Suez said.
Write to Olivia Bugault at email@example.com