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Financials

Ardian-GIP questions its participation in Veolia-Suez deal

PARIS, April 20 (Reuters) - Investment funds Ardian and Global Infrastructure Partners may not participate in the plan to create a new French water company after the takeover of Suez by its bigger rival Veolia,, a spokesman for the funds said on Tuesday.

Veolia and Suez on April 12 announced a 13 billion euro ($15.66 billion) merger under which - in part to ease antitrust problems - some of Suez’ assets will be spun off into a new entity with around 7 billion euros in revenue.

Investment funds Meridiam, Ardian and Global Infrastructure Partners as well as state-backed Caisse des Depots and employees would be shareholders in a “new Suez”, which would mainly comprise Suez’s French water activities and some international assets, including in Italy, Czech Republic, India and Australia.

Meridiam was set to own 40%, Ardian/GIP 40% and the others 20%, but a price for that carve-out has not yet been set.

Ardian-GIP, which in March had formulated a counter-proposal to the Veolia bid, has several important questions about the agreement, which is set to be finalised by May 14, a spokeswoman said, confirming a report in newsletter La Lettre A.

“There are a certain number of points that are incompatible with our project in the agreements as it is presented to us today,” the spokeswoman said.

“Clearly if these points are not changed, we would not be able to participate in this project,” she added.

The consortium notably disagrees with the make-up of the assets in the “New Suez”.

Ardian-GIP, which was not involved in the discussions that led to the deal, regrets being assigned a minority stake and points at the hostility of Suez’s unions to the agreement.

A source close to Veolia said that a possible withdrawal of Ardian-GIP would not jeopardise the deal.

“We are ready to take a bigger stake if we are asked,” said a spokesman for Meridiam, which has previously said it was ready to acquire the split-off Suez water business on its own.

The economics ministry, which has welcomed the Veolia-Suez agreement, declined to comment.

Suez shares were up 0.2% in afternoon trade, outperforming Veolia shares, down 1.4%. ($1 = 0.8304 euros) (Reporting by Gwénaëlle Barzic; Writing by Geert De Clercq; editing by David Evans)

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