PARIS: French financial markets watchdog AMF said on Friday that water and waste company Suez's attempt to fight Veolia's offer breach takeover rules.

In an effort to force Veolia to negotiate, the Suez board has set up a Dutch foundation to prevent the sale of French water assets that its rival would need to divest to win antitrust approval to buy Suez.

Suez also proposed last month to negotiate a takeover if the two companies agreed on the sale of most of Suez's French assets to investment funds Ardian and Global Infrastructure Partners (GIP).

Veolia had rejected the proposal.

Suez had no immediate comment after the AMF's statement.