SGS, Bureau Veritas Said to Abandon $33 Billion Tie-Up Over Risk

(Bloomberg) — SGS SA and Bureau Veritas SA unexpectedly terminated merger talks that would have created a global leader in the product-testing sector.

Bureau Veritas, which is based in Neuilly-sur-Seine, France, and Geneva-based SGS said in separate statements Monday that their discussions have ended, without providing a reason. 

The French company said in its statement that it continues to hold a “strong belief in the value of consolidation in the testing, inspection and certification sector.” The Swiss firm said it remains focused on its growth strategy.

As recently as Friday, the plan was to announce an agreement by the end of this week, according to people familiar with the matter. But negotiations deteriorated over the weekend, they said, asking not to be identified because discussions were private.

SGS pulled the plug on the deal over the weekend amid growing concerns around the perceived risks related to executing such a complex mega-merger, including navigating the integration and the regulatory approval process, the people said. Issues included Swiss concerns about having sufficient support for the transaction from all of Bureau Veritas’s executives, said some of the people. 

The deal would have taken an estimated 12 to 15 months to complete, the people said, making the alignment of both management teams crucial, the people said.

While the broad strokes of the terms and management structure of a deal were agreed, there remained differences over various details of the transaction, the people said. Management of the merged company was largely decided, including making SGS Chief Executive Officer Geraldine Picaud the head of the combined business, some of the people said. Bureau Veritas CEO Hinda Gharbi was set to leave after the deal, though there were still some outstanding tasks to name which specific individuals would serve on the board, according to the people. 

The somewhat negative share price reaction of SGS to the news of a potential deal also contributed to nervousness, while the strength of the Bureau Veritas stock may have heightened certain French demands, some of the people said. SGS shares fell about 8% and Bureau Veritas stock was largely unchanged between the time that Bloomberg News first reported the talks late on Jan. 14 and Friday. On the day after the report Bureau Veritas rose as much as 6.2%.

In the end, the two sides couldn’t get the deal across the finish line, ending the ambition of creating a new European champion in the testing and certification space. 

SGS and Bureau Veritas declined to comment on the reasons for the termination of the talks.

The companies earlier this month confirmed Bloomberg’s report on their discussions in a deal that would have created an entity with a combined market value of almost $33 billion. 

The merger talks had come as consolidation intensifies in the industrial testing, inspection and certification sector that’s globally valued at more than $230 billion by MarketsandMarkets, and is growing amid increased regulations for environmental and other standards. The highly fragmented industry, that includes other players like Trojan Technologies Inc., Dekra Testing and Certification SA and Intertek Group Plc, doesn’t have a single player accounting for more than 5% of the total market.

The two companies were working on an all-stock transaction, according to people familiar with the situation, with the shareholders of SGS set to hold a majority in the combined entity and Bureau Veritas’s owners receiving some kind of premium.

SGS and Bureau Veritas had estimated that a deal could lead to an annual reduction in costs of more than €400 million ($419 million) at the combined entity, according to people familiar with the matter. 

The companies certify everything from cosmetics to food and toys and consumer electronics. They also ensure supply chains by inspecting goods during production and shipping and verify industrial emissions and sustainability claims. 

–With assistance from Julien Ponthus.

©2025 Bloomberg L.P.