Last month Veolia made its offer for a 29.9% stake in Suez owned by Engie, with a view to subsequently taking full control of Suez by buying up more shares.

Engie, which owns almost 32% of Suez, rejected Veolia's initial advance but has said it would consider a higher offer.

Veolia's CEO Antoine Frerot said on Friday that the company would increase its offer to buy a 29.9% stake in Suez and had the capacity to do so.

He also said Veolia's offer remained valid until Sept. 30.

Suez shares were up 0.60% at 0729 GMT.

(Reporting by Matthieu Protard; Editing by Kim Coghill and Susan Fenton)