Both French parent companies of waste firms Veolia and Sita have issued statements denying market speculation of a merger.
Over the weekend the Financial Times reported sources close to Suez Environnement and Veolia Environnement saying the waste and water giants had held preliminary merger talks before deciding there would be too many hurdles over valuation and competition concerns.
In a statement released Saturday Suez said it denied “that it is working on a business combination with Veolia Environnement”.
Veolia said: “Following market rumors, a merger with Suez Environnement is not on the agenda.”
The FT reported that failure to agree how to value the companies was seen as the biggest block to a merger. I
It said: “Veolia is far bigger than Suez, with €30bn of sales in 2011 compared to €15bn, but its shares have suffered badly because of heavy writedowns related to problems in its international businesses and worries about its €15bn of net debt.
“As a result, Veolia’s market value of €4.4bn is barely bigger than the €4.3bn of its smaller rival.”