Talks to create a certification giant ended without an agreement. France’s Bureau Veritas and Switzerland’s SGS each issued a statement today, January 27, reporting that the negotiations had ended without a deal.
“These discussions have stopped and did not result in an agreement despite a strong belief in the value of consolidation in the testing, inspection, and certification sector,” said Bureau Veritas. The company reported it, “Remains fully committed to its LEAP | 28 strategy to deliver a step change in growth and performance, targeting high single-digit total revenue growth, consistent adjusted operating margin improvement, double-digit shareholder returns, and dividend yield, and strong cash conversion.”
Similarly, SGS said, “The group remains focused on the continued execution of Strategy 27 – ‘Accelerating growth, building trust’ and delivering superior value to its shareholders.”
Analysts highlighted that the two companies had previously explored a merger unsuccessful. The deal, which Bloomberg had speculated was in advanced talks, would have been the largest merger of 2025 and the first in the sector in a decade. One of the challenges was reported to be the similar size of the two companies which would have required a merger of equals. Speculation set the value of the deal at $30 billion.
“This is not the first time the companies have engaged in talks,” said Jean-Philippe Bertschy an analyst at asset manager at Vontobel. He wrote the companies “have been eyeing each other for years,” speculating this is “probably the third or fourth time such talks have taken place.”
Each of the companies under new management teams had recently outlined strategies for growth and improved financial performance. Each has been perusing a series of smaller acquisitions but analysts had raised concerns about the potential overlap in portions of the business. However, in the maritime sector, BV is a recognized leader while SGS is less involved mostly providing marine inspections and fuel testing as part of its overall services.
The industry realized new opportunities during the pandemic when there was a focus on safety programs. More recently, the testing and certification sector has been working to capture the emerging opportunities from the strong focus on sustainability.
Investors in BV were disappointed with the stock losing as much as three percent of its value on the announcement. SGS share value however rose up nearly five percent on the news that the discussions had ended.
source: www.maritime-executive.com
