UPDATE 1-Some sense in possible Veolia-Suez deal -French PM

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PARIS, Sept 3 (Reuters) - There is some industrial logic regarding a possible takeover of French utility Suez by domestic peer Veolia, French Prime Minister Jean Castex said on Thursday, adding it was important that jobs be preserved in any deal.

The blessing of the French government is likely to be key towards ensuring any transaction takes place.

On Sunday, water and waste management company Veolia launched a bid for Suez at 15.50 euros per share, offering to buy a 29.9% stake from utility Engie for 2.9 billion euros ($3.4 billion) as a first step toward a full takeover.

The French state holds a 23.6% stake in Engie.

“To me, it seems that the operation has some sense,” Castex told reporters at a news conference on Thursday.

State bank Caisse des Depots (CDC) has a 5.7% stake in Veolia.

Veolia, a world leader in the waste and management industry, although the sector is very fragmented, has argued that the deal would create a global French champion well placed to see off emerging competition from China.

$1 = 0.8462 euros Reporting by Sudip Kar-Gupta and Matthieu Protard; editing by Jason Neely