Suez eyes U.S. expansion
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August 19, 1999: 2:44 a.m. ET
French utility giant may boost stake in United Water Resources; Tractabel in play
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LONDON (CNNfn) - The world's biggest water-treatment firm, Suez Lyonnais des Eaux, is in talks with New Jersey-based United Water Resources which could see the French firm boost its 32 percent stake to take control of the second-largest U.S. water company.
Suez (PLY) and fellow French utility Vivendi (PEX) have expanded aggressively in the U.S. market over the past year with more than $13 billion in acquisitions.
Suex is also reportedly increasing its stake in Tractabel, Belgium's largest utility, whose shares were suspended Wednesday. The French firm already holds just over 50 percent of Tractabel.
Suez confirmed it was in talks with United Water (UWR) to review their four-year old strategic tie, "including a possible increase of its stake in UWR".
The U.S. firm's shares jumped more than 12 percent to close up 3-3/32 at 27-5/8 Wednesday. Suez added a modest 0.5 percent at 163.9 euros.
Analysts viewed the move as a defensive tactic to prevent a rival bid for United, which serves 7.5 million customers in 19 U.S. states and also has operations in Britain and Mexico.
Suez' U.S. expansion includes its planned $4.1 billion acquisition of Illinois-based Nalco (NLC), the world's largest water treatment business. Suez paid $425 million in June for Pittsburgh-based Calgon (CCC), the third biggest water firm in the U.S.
Suez' recent acquisitions allowed it to leapfrog Vivendi as the global number one. Vivendi had claimed the top spot following its $6.2 billion bid for U.S. Filter (USF).
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