Engie Welcomes Improved Suez Bid

French water and waste utility Veolia has improved its offer to buy a 29.9% stake in smaller peer Suez from French gas and power group Engie and has agreed to extend its validity period, the companies said on September 30.

Veolia offered to pay €15.5/share or €2.9bn ($3.5bn) in cash for the asset in late August but Engie rejected that offer. But Engie said on September 30 it welcomed Veolia's second, improved offer of €18/share. Veolia has also promised not to launch a hostile takeover for the Suez shares, and to ensure job security for the company's employees in France.

"The board therefore considered that this new offer is in line with its expectations in terms of price and social guarantees," Engie said. The company also requested an extension of the offer until October 5 and a formal commitment from Veolia not to make a hostile bid. Veolia said it had granted both requests.

Suez's board of directors and employee shareholders have also announced their support for the deal.

Engie announced in late July it was looking to double its divestment target to €8bn. It is targeting the sale of client services operations, minority stakes and other non-core activities, to raise cash to invest in lower-carbon energy.