The Suez Company or Suez Canal Company, full initial name Compagnie universelle du canal maritime de Suez (Universal Company of the Maritime Canal of Suez), sometimes colloquially referred to in French as ("The Suez"), was a company formed by Ferdinand de Lesseps in 1858 to operate the Egyptian granted concession of the Suez Canal, which the company built between 1859 and 1869. Initially, French investors held half of the Company's stock, with Egypt's ruler Sa'id Pasha holding most of the balance. In 1875, financial distress forced Sa'id's successor Isma'il Pasha to sell the country's shares to the government of the United Kingdom. The Suez Company operated the canal until Egypt's new president Gamal Abdel Nasser revoked its concession in 1956 and transferred canal operation to the state-owned Suez Canal Authority, precipitating the Suez Crisis.
Following the loss of the canal concession, the Suez Company received financial compensation from the Egyptian government, the final payment of which was made in 1962, and used this resource to reinvent itself as a major investment and holding company in France. In 1958 it renamed itself the ("Suez Financial Company"), and in 1967 changed its name again to , a change that was reversed in 1972. It was nationalized in 1982, then privatized in 1987. It acquired control of the Société Générale de Belgique in 1988, and changed name again to in 1990. In 1997, it merged with water utility and construction conglomerate to form Suez-Lyonnaise des eaux. The merged entity renamed itself as Suez in 2001 and underwent several subsequent mergers, spin-offs, and restructurings that led to the creation of the energy company Engie and the water and waste-management utility also named Suez.
Background
Original canal concession (1854) In 1822, King William of Orange founded the "Société Générale des Pays-Bas" in Brussels; subsequently, in 1830, the Société Générale des Pays-Bas became the Société Générale de Belgique. The original concession assembled by Lesseps and granted by Sa'id of Egypt in 1854 included the following stipulations: 10 percent of the annual profits were reserved for the founders, 15 percent of the annual profits were reserved for the Government of Egypt, and 75 percent of the annual profits were reserved for shareholders. There was no stipulation dictating whether the route of the canal would be direct or indirect (from the Nile). The company was given the right to free quarries and import equipment tax-free.
In that original concession, founding members of the Company were to receive 10 percent of the canal's profits. These members included François Barthélemy Arlès-Dufour, Louis Maurice Adolphe Linant de Bellefonds, Richard Cobden, Barthélemy Prosper Enfantin, Benoît Fould, Lesseps and several members of his family, Eugène Mougel, Ruyssenaers (Dutch Consul General in Egypt), M. Sabatier (French Consul General), Sa'id of Egypt and multiple members of his family, Paulin Talabot and his brother Edmond, and members of the chambers of commerce of Lyon and Venice.
Second canal concession (1856) Following the granting of the first concession in 1854, Lesseps was in near constant travel to assemble diplomatic approvals perceived as necessary to build the canal from other foreign governments involved. Although the first concession was granted by Egypt, at the time Egypt was an administrative subdivision of the Ottoman Empire, and so Lesseps traveled frequently to the Sublime Porte to make his case to the Grand Vizier of the Sultan, Ali Pasha. The Ottoman Empire, although neutral to the idea, were greatly under the influence of the British at that time. Since Britain – through the policy of Lord Palmerston – was largely opposed to the canal project, and its citizens owned a potentially competing project in form of a railroad from Alexandria to Cairo, not to mention various merchant warehouses along the African sea route, Lesseps made several trips to Britain between 1854 and 1858 to persuade Palmerston and the British public. Lesseps also had to fight back against Robert Stephenson's and even Enfantin's expert opinions on the feasibility of the canal. Lesseps formed an organization of international engineers (the International Commission for the piercing of the isthmus of Suez) to again study the canal route in late 1855, and its results were released to the general public.
In January 1856, Said granted a second concession to Lesseps' company which replaced the first concession. This concession defined the canal as a direct route, but also stipulated a freshwater canal from the Nile to Lake Timsah. Again, mining and land rights were included along with generous tax exemptions. A majority (ths) of the workers for the company were required to be supplied from Egypt and the skilled workers were required to be paid commensurate with skilled workers on other Egyptian public works projects. An amendment stipulated that work could only commence with the approval of the Ottoman Sultan. The board of directors of the concessionaire company would have 32 members, each serving for eight years. The operations office would be headquartered in Alexandria, while administrative offices would be located in Paris. This company was to be called the Universal Company of the Maritime Canal of Suez.
Creation and initial public offering
In late Spring of 1858, the French Academy of Sciences released a public report approving of the engineering plans for the canal. The report noted that in the previous two decades, Europeans had spent 12 billion francs building railroads, and that at a cost of 200 million francs (or £8 million), the canal was affordable. Lesseps pushed ahead without formal British or Ottoman approval. In October 1858, Lesseps notified international press and company agents that 400,000 shares at a price of 500 francs each would be publicly offered beginning 5 November 1858. In the notification, Lesseps estimated an annual revenue of 30 million francs based on freight fees, and a construction period lasting 6 years. In preparation for the offering, shares were sent to brokerage houses across Europe and in the United States. At the close of offering on 30 November 1858, about half of the shares (around 200,000) belonged to French citizens with the next largest block owned by citizens of the Ottoman Empire (Said bought around 60,000). None of the shares reserved for Britain, Russia, Austria, or the United States were bought. Said purchased the remaining unbought shares (for a total of 177,000 shares) in order to ensure that the company reached its necessary capitalization amount (to become a legal entity as defined in the 1856 concession). The average number of shares bought by French investors amounted to nine shares each. Lesseps declared the company as being officially formed on 15 December 1858.
Canal construction
Prior to the existence of the Suez Canal, Port Said and Lake Timsah had few residents, the Great Bitter Lake was a dry basin, and drinking water was difficult to find. In addition to infrastructure challenges, Said would not allow the use of massive corvée labour until 1861, when Napoleon III publicly backed the canal project. In the meantime from 1859 to 1861, the company's Chief Engineer Eugène Mougel and its new superintendent Alphonse Hardon, planned for and built fresh water distilleries along the route, hauled in additional fresh water from the Nile, built housing for workers, gathered stone for the jetty, assembled some aging dredging equipment from the Nile, and looked for workers. Company town establishments arose along the route. In 1860, the company employed 210 Europeans and 544 Egyptians along 11 stations of the route. Employees were provided scrip to buy provisions. Plans were made for an access canal from the Nile to Lake Timsah to provide fresh water. Once the necessary infrastructure was established, the plan was to build an 8 metre-wide access canal from Port Said to Lake Timsah and later from Lake Timsah to the Red Sea with the aid of blasting. After the use of corvée labor was approved in 1861, work proceeded south from Lake Manzala with, at its height, 60,000 fellahin hand digging the canal. Guards were used to watch over the fellahin, although a large number of guards were not required due to the remote location and nearby hostile Bedouins. At the same time, the freshwater canal was being dug easterly to Lake Timsah. At the end of 1862, the access canal connecting Lake Timsah to the Mediterranean Sea was complete. François Philippe Voisin became chief engineer in January 1861 and Hardon's contract expired at the end of 1862. Compared with the later mechanised excavation, a low amount of material was excavated during this phase of construction. The British began to loudly decry the use of corvée labor in 1862.
Said died in January 1863. His successor, Isma'il, declared that he was establishing reforms in the ways of the creation of a civil service list and the abolishment of corvée labor. Ismail's motives had to do with his own personal projects (cotton farms, whose export from Egypt had been increasing since the beginning of the American Civil War, and other cash crops and public works) within Egypt and with limiting the company's power. Ismail would soon issue a clarification that corvée labor could still be used for public works essential for the common good (though not on the Suez Canal project). The British also commented on the use of forced labor by the company. Ismail issued declarations upholding much of the previous concessions, with exceptions including the labor issue. Aziz favored the end of the use of the corvée and the return of land from the company to Egypt. The problem was referred during 1864 to the arbitration of Napoleon III. Ismail authorised Boghos Nubar Nubarian to negotiate on behalf of Egypt, and Nubar in turn allied with Emile Ollivier and Morny against Lesseps and the company. It wasn't until July 1864 that Napoleon III released a ruling for the framework for resolution which accepted the 1856 concession as a binding contract, ended the use of corvée labor, placed the land grants back into the hands of the Egyptian government, but called for remuneration of 84 million francs to the Suez Canal Company for violation of the labor and land agreements. Ismail received a loan from the Oppenheim brothers for nearly 100 million francs.
Meanwhile, the progress of the canal construction proceeded slowly from 1863–1864. By February 1864, the corvée had finished the access canal from Lake Timsah to the Red Sea.