ZURICH: Switzerland’s testing and inspection group SGS says it has ended talks over a potential US$30bil merger with French rival Bureau Veritas.
“SGS and Bureau Veritas have been exploring a potential combination. The discussions have not resulted in an agreement and have ended,” SGS said in a brief statement.
A spokesperson for SGS said the company had nothing to add at present about the reasons for its decision.
SGS said earlier this month it was in talks to combine with Bureau Veritas in what could have been an all-stock transaction, according to a source.
That would have meant that SGS shares would trade in Paris, a fact which could have led to complications due to tit-for-tat measures imposed years ago during a Swiss-European Union (EU) stock market row.
Such listings of Swiss shares in the EU are forbidden by protective measures Switzerland issued in 2019 when the bloc withdrew its recognition of equivalence for the Swiss exchange amid a dispute over bilateral trade talks at the time.
The Swiss government drew up measures that it said would help protect the domestic stock market should the EU seek to block EU-based investors from trading on Swiss exchanges in a row over a new treaty, Reuters reported last June.
Frustrated by the lack of progress in treaty talks, Reuters reported at the time that the EU said it would not recognise the equivalency of Swiss stock market regulation beyond the end of June, which would mean EU-based banks and brokers can’t trade on Swiss exchanges.
They generated more than half the turnover on Swiss stock markets.
Without commenting specifically on the SGS-Bureau Veritas deal, Swiss financial authorities acknowledged that the situation presented potential problems for the tie-up.
It is unclear what, if any, influence the stock market issue had in bringing an end to the talks. — Reuters
