SGS's proposed $30 billion merger with French competitor Bureau Veritas could face obstacles due to retaliatory actions enacted during a previous Swiss-EU stock market dispute.
Last week, SGS announced intentions to merge with Bureau Veritas in an all-stock deal, with SGS shares potentially trading in Paris. However, protective measures implemented by Switzerland in 2019 may prohibit Swiss shares from being listed in the EU, in response to the EU's withdrawal of market equivalence for the Swiss exchange during trade negotiations.
While a SIX Swiss stock exchange spokesperson acknowledged that these protective measures could pose challenges for Swiss-listed companies involved in international takeovers requiring EU listings, SGS chose not to comment.
Efforts are being made to rescind these measures in light of the merger. The Swiss finance ministry refrained from commenting on the potential merger but recognized the potential hurdles posed by the protective measures, which might complicate Swiss companies' acquisition of European firms resulting in dual stock listings.
The ministry has advocated for the removal of these protective measures and garnered support from parliamentary committees, coinciding with an overhaul of trade ties between Switzerland and the EU in December. Despite the EU's financial regulation changes in 2024, the Federal Council of Switzerland is yet to decide on repealing the measures, as some resistance remains.
Swiss Banking, a financial sector lobby group, maintains that the protective measures should only be lifted once EU recognition of Swiss stock exchange regulations as equivalent is reinstated.
SIX Swiss Exchange expressed willingness to consider modifications that facilitate transactions like SGS's potential acquisition of Bureau Veritas, stating a potential endorsement for EU dual listings under exceptional circumstances where justifiable reasons exist.