PARIS (Reuters) - The head of Suez (PA:SEVI) dismissed an offer by water and waste management rival Veolia (PA:VIE) to buy a stake as "disastrous" for France.
Last Sunday Veolia offered 2.9 billion euros ($3.4 billion), or 15.50 euros per share, to buy a 29.9 per cent stake in Suez from electric utility Engie. (PA:ENGIE)
Suez CEO Bertrand Camus told French daily Le Figaro this was an "opportunistic financial operation", which undervalued Suez assets and "underestimates competition issues and execution risk".
"Veolia is not proposing an industrial project. It proposes to dismantle 40% of our business in France," Camus said, as he warned of hefty job cuts if the deal went through.
"Suez does not need to marry. We are already the world leader of water distribution, suppplying 145 million households," he said.
Veolia has argued that although the water distribution sector is very fragmented, the deal would create a global French champion well placed to see off emerging competition from China.
Suez was also working on alternative scenarios regarding the purchase of Engie's stake, Camus added.
Earlier on Sunday Finance Minister Bruno Le Maire said the French state will look with "fairness" at Veolia's offer for Engie's stake in Suez as well as at any other offer that could emerge.
It was paramount that jobs in France be preserved in any deal, that the future majority shareholder be French, and that the valuation of the future deal be "satisfactory" for the French state, which has a stake in Engie, Le Maire had said.
The blessing of the French government is key for any deal as the state holds a 23.6% in Engie.