Engie will retain full ownership of the business. Credit: Engie.

French power and utility company Engie has rejected a $3.4bn (€2.9bn) offer to buy its water and waste disposal company Suez.

Public services company Veolia offered to buy a 29.9% stake in Suez, which it would then use to launch a full takeover bid. A Veolia spokespersons said it would pay in cash, at more than 50% above the stock market price of shares.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Board members of Engie have said it should seek a better deal. Suez’s second biggest shareholder, Spanish bank Criteria, has no interest in forming a consortium with Veolia.

In an interview with French newspaper JDD, Suez chairman Phillippe Varin said Veolia’s offer was “very hostile”. He also said Veolia’s ownership would hurt Suez’s ability to do business overseas.

Veolia chairman and CEO Antoine Frérot rejects this, saying: “This historic opportunity will enable us to build the French world champion in ecological transformation, while accelerating international development and strengthening the new entity’s capacity for innovation.”