SIX protection complicates SGS-Veritas deal

Swiss stock exchange protections complicate SGS-Veritas deal

2025-01-23 19:44:00 :

Swiss-EU stock market dispute affects SGS and Veritas merger

Swiss Finance Ministry supports lifting protection measures

Swiss banking industry opposes removal of protections without EU equivalent measures

Author: Oliver Hurt and Ariana Lucey

ZURICH – A potential $30 billion merger between Swiss company SGS and French rival Bureau Veritas could be mired in tit-for-tat measures taken during Switzerland’s stock-market spat with the European Union years ago.

SGS said last week it was in talks with French rival Bureau Veritas over a possible all-stock deal, which would mean SGS shares would trade in Paris, according to a person familiar with the matter.

However, Swiss safeguards enacted in 2019 bar Swiss stocks from being listed in the EU when the EU withdrew its recognition of Swiss exchanges’ equivalent status amid a dispute over bilateral trade talks.

“In exceptional circumstances, protective measures do create obstacles for companies listed in Switzerland,” a spokesman for SIX Swiss Exchange told Reuters.

“This would be the case, for example, if foreign law requires a listing in the EU in the context of an international acquisition.”

The authorities appear to have noticed the potential trouble and are taking steps to roll back the measures.

The Swiss Finance Ministry declined to comment on a potential collaboration between SGS and Bureau Veritas. But it acknowledged that such deals could face problems.

“It cannot be ruled out that existing stock exchange protections could make it more difficult for Swiss companies to acquire European companies if the takeover results in a dual listing of Swiss shares,” a ministry spokesman said.

The ministry recently advocated for the removal of protection measures and received support from several parliamentary committees in January. One of the people noted that Switzerland and the EU finally reached an agreement in December to overhaul their trade relationship.

The Swiss Federal Council has yet to decide whether to repeal the measures.

The ministry said that in light of changes to EU financial rules in 2024, these measures no longer have a significant basis.

But resistance to ending these measures remains.

Financial industry lobby group Swiss Banking said protections should not be lifted until the EU again recognizes SIX Swiss Exchange regulations as having equal force.

SIX Swiss Exchange said it was open to changes that could help deals such as SGS’s takeover of Bureau Veritas.

“While we remain critical of the removal of safeguards, we would be in favor of allowing dual listings in the EU in exceptional circumstances if objective reasons justify this,” a No.6 spokesman said.

This article was generated from automated news agency feeds without modifications to the text.

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