French court rules Veolia must consult unions on Suez stake

PARIS (Reuters) - A French court ruled on Friday that unions must be consulted on the sale of gas utility Engie’s 29.9% stake in waste and water group Suez to larger rival Veolia before it can proceed.

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However, Engie ENGIE.PA and Veolia VIE.PA said in separate statements that they would appeal the ruling and that it would have no impact on the Suez SEVI.PA transaction.

“The ruling recognises the right of Suez’s employees and their representatives to be involved in decisions that directly impacts their future,” the unions said in a statement

The Suez works council, in which the company’s main unions are represented, last month filed a lawsuit aimed at suspending Veolia’s bid. Under French law, works councils must be consulted about major changes such as a corporate takeover.

A lawyer for the Suez works council said that the ruling does not annul the sale of Engie’s stake, but orders Veolia to halt all further steps until the works council has been duly informed and consulted, which could take two to three months.

“Veolia has no choice but to respect this decision,” Zoran Ilic, a lawyer for the works council, told Reuters.

Ilic added that the works council does not have the power to reverse the deal, but can have it suspended if its rights have not been respected.

Veolia said in a statement that the court decision had no legal base as only Suez itself is entitled to inform and consult its works council. It added that Suez leadership had not consulted its works council because it opposes Veolia’s bid.

“It is grotesque to blame Veolia for not consulting the Suez works council as Veolia does not have the right to do that,” Veolia said.

Veolia added that it had presented its plans for Suez to the Suez management and that it is available to present its project to Suez staff.

Valerie Dolivet, a lawyer for Suez trade unions said the ruling halts all planned next steps, notably the full takeover of Suez and the sale of Suez’ French water unit, until employees’ representatives have been consulted.

Reporting by Matthieu Protard and Geert De Clercq; Editing by Louise Heavens and Alexander Smith