Unshackling France SA

IF DINNER PARTIES were permitted in locked-down France, it is not hard to guess what would set aflutter. For months bankers, politicians and other pre-covid canapé-scoffers have taken sides in a corporate battle royale pitting two century-old firms against each other. Veolia, a water- and waste-management utility, has been struggling to gobble up Suez, a rival which is resisting fiercely. The proposed deal is mired in legal disputes, boardroom recriminations and ministerial intrigue. All grist to the mill for those who see French business as the product of its politicians’ dirigiste tendency to shape the private sector in the mould of the public one. But look at the wider French business landscape and the stereotype is out of date. Away from the clutches of politicians, many French firms have become world-beaters. Is this thanks to the attention of elected officials—or in spite of it?The ugly spat between Veolia and Suez shows politics still matters in Parisian business circles. Given the two firms offer the same outsourced environmental services to customers dotted across the globe, a tie-up has long been mooted. Veolia having already seized nearly a third of its target’s shares, each side has lined up members of to make its case. Their brief is not so much to convince shareholders of the merits of a deal, as might be the case in Britain or America. Rather, politicians whose assent is considered critical are an important audience. Suez and Veolia are each said to have a former speechwriter to President Emmanuel Macron lobbying for them (not the same one). Given that a slew of legal challenges and regulatory clearances is required, the outcome will not be known for months. Few think it will hinge on the transaction’s commercial merits.