Bouygues in talks to buy Engie’s Equans for $8.2b

Bloomberg

French energy giant Engie SA entered exclusive talks to sell its services unit Equans to conglomerate Bouygues SA for 7.1 billion euros ($8.2 billion) in what would be one of the country’s largest deals this year.
“Bouygues’ offer was the most compelling taking into account all criteria including financial valuation,” Engie, based near Paris, said in a statement. Bouygues beat out other suitors including French rival Eiffage SA and US buyout firm Bain Capital, confirming an earlier report by Bloomberg News.
The sale will help Engie fund its quickening transition to cleaner energy, including renewable power generation and infrastructure such as district heating and car-charging networks. The power and gas utility already sold most of its stake in French water company Suez SA a year ago, and a stake in its French gas-transmission network in July.
For Bouygues, a Paris-based construction, telecommunications and media conglomerate that had almost 35 billion euros in revenue last year, the acquisition of Equans will reinforce its own under-performing energy and services unit. Equans installs and maintains air conditioning, electrical systems and telecommunications equipment, and generates more than 12 billion euros in annual revenue.
The sale has been a politically sensitive one for Engie and the French government ahead of next April’s presidential election, as Equans employs more than a third of its 74,000 workers in the country. Bouygues has agreed to not implement any forced redundancy plans in France and Europe for five years after the deal closes, and to create 10,000 additional jobs in the period, Engie said.
Engie expects the deal to be completed in the second half of next year.
Shares of Bouygues have risen 5.8% in Paris trading this year, giving the company a market value of about 13.6 billion euros. Engie shares have risen just 1.5% this year. By comparison, France’s benchmark CAC40 Index has climbed almost 27% in the period.
French industrial group Spie SA dropped out of the race for Equans in October.