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Swiss group SGS and Bureau Veritas of France have ended talks on a potential merger that would have created a €30bn specialist in testing and certification services.
Both companies said on Monday that discussions had ended, dashing the possibility of a major European takeover after negotiations reached an advanced stage this month.
Bureau Veritas said the discussions “have stopped and did not result in an agreement, despite a strong belief in the value of consolidation” in the testing and certification sector. SGS also confirmed talks had ended.
One person familiar with the matter had previously said an agreement could be secured by the end of this week.
Shares in SGS rose 4 per cent in early trading on Monday, while Bureau Veritas stock fell 3 per cent.
The combined business would have had about 8 per cent of the €160bn to €180bn testing and certification industry, which covers everything from food safety checks to engineering compliance on buildings.
Switzerland’s SGS, which has a roughly SFr16bn ($17.7bn) market value, would have in effect been taking over Bureau Veritas, though people involved in the discussions said negotiators were aiming to create a “marriage of equals”. The French group had a market capitalisation of €13bn on Monday.
Both companies had cornerstone shareholders, with the French investment firm Wendel owning 26.5 per cent of Bureau Veritas. French state investment bank Bpifrance also has 4 per cent of the group.
Belgium-based Groupe Bruxelles Lambert holds a 19.1 per cent share in SGS.
Multiple players in the testing and certification industry have explored merger talks in recent years, but deals have not emerged. Bureau Veritas broke off negotiations with UK rival Intertek in autumn 2024 to pursue a tie-up with SGS instead.
“While we saw some rationale in a merger, we questioned the timing of a deal and the appetite from existing shareholders to take on a likely long, complex and higher risk integration, having only recently bought into relatively new management team strategies,” Allen Wells, analyst at Jefferies, wrote on Monday.
France’s finance ministry had been keeping an eye on the negotiations in order “to assess whether such a project could raise risks of harm to our sovereignty”, according to a government official. But ultimately “as two private, listed companies it is up to them, as well as their shareholders, to decide on the corporate strategy”.
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