PARIS Oct 20 Veolia Environnement <Vie. pa> and
Suez Environnement said on Saturday they were not
working on a merger after Le Monde newspaper reported the two
companies had held talks that fell apart over antitrust
"Suez Environnement denies that it is working on a business
combination with Veolia Environnement," Suez said in a
Veolia said in a separate statement: "A merger with Suez
Environnement is not on the agenda."
Le Monde said the two French companies, which specialise in
providing waste, water and environmental services to
municipalities and corporate clients, negotiated about a
possible merger during several meetings in September after
Suez's CEO made an initial approach.
The proposed deal was later abandoned because the groups'
combined market share in France would be too large, and
significant divesting would be needed to obtain regulatory
clearance, the newspaper said, without citing sources.
That the two competitors were considering a tie-up is a sign
of how the global economic slowdown has hit the waste and
environmental services sector.
Both Veolia and Suez have seen lower sales because global
volumes of industrial waste have declined in recent quarters.
Suez's finance chief told Reuters in a recent interview that
processed waste volumes - a measure of industrial production
which has a significant impact on the company's results - would
fall around 3 percent in 2012, as expected, with the decline to
continue "at least" into the first half of 2013.
Veolia has also been cutting costs and selling assets this
year to cope with lower demand and reduce its debt.
Suez shares closed at 8.43 euros on Friday, valuing the
company at 4.33 billion euros. Veolia shares closed at 8.51 euro
for a market capitalisation of 4.54 billion euros.
(Reporting by Leila Abboud; Editing by Ralph Gowling)