ZURICH, Jan 27 – Swiss testing and inspection giant SGS (SGSN.S) announced it has ended discussions with French rival Bureau Veritas (BVI.PA) over a potential $30 billion merger, following an inability to reach an agreement.
“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 on Monday.
The news sent SGS shares soaring as much as 7%, though gains later moderated, while Bureau Veritas shares dropped 3.8%. An SGS spokesperson declined to elaborate further on the decision, but sources familiar with the matter attributed the collapse to minor contractual issues and execution risks that could not be resolved.
Earlier this month, SGS confirmed it was exploring a merger with Bureau Veritas in what was expected to be an all-stock transaction, a move that could have seen SGS shares listed on the Paris stock exchange. However, such a listing would have faced potential complications tied to a 2019 Swiss-EU stock market row, which led Switzerland to ban the trading of Swiss shares on EU exchanges after the European Union withdrew recognition of the Swiss stock exchange’s equivalence.
Swiss financial authorities, aware of the potential challenges the merger posed, had reportedly been working on withdrawing these protective measures to ease cross-border stock market tensions. However, a source familiar with the situation downplayed the stock market issue, suggesting it was not a major factor in the breakdown of talks.
The merger would have combined two of the world’s leading testing, inspection, and certification firms, which play a critical role in verifying the safety and quality of products, ingredients, and processes across industries. Despite the failed talks, the source suggested that the groups may explore other collaboration opportunities in the future.
For now, the end of the proposed tie-up leaves SGS and Bureau Veritas to continue as separate entities, with industry observers watching to see if similar consolidation efforts will surface in the increasingly competitive testing and certification market.
