France
defends GDF-Suez merger in face of criticism
By
Adam Plowright
AFP
PARIS
Petroleumworld.com
02 29 06
The French government stepped up its defence of a proposed merger
between Gaz de France and Suez on Tuesday, saying the deal was
the result of consolidation forces in the European energy sector
amid growing fears about fossil fuel supplies.
Meanwhile, the companies said they would notify the EU of their
intentions in April and insisted that plans for their tie-up had
been underway before the emergence last week of a rumoured bid
for Suez by Italian group Enel.
The merger, which has been portrayed as a defensive move by Paris
to block a possible bid by Enel, has irked the Italian government
and has raised questions about the openness of the French economy
to foreign investors.
Speaking in parliament, French Finance Minister Thierry Breton
said: "In 2005, we experienced and we continue to experience
one of the worst crises in the energy sector in which the price
of a barrel (of oil) has doubled in less than 12 months."
He added: "European companies are all in the process of building
alliances because today, in a world where fossil fuels are becoming
more and more rare, only size matters."
Breton underlined that a merged Suez-GDF group would mean two
of the three biggest energy companies in the world were French.
The other is Electricite de France (EDF), currently the biggest
energy group in the world.
He also said GDF and Suez had decided to begin talks themselves
and had told him before Christmas of their desire to form an industrial
partnership.
The chief executive of Suez, Gerard Mestrallet, told reporters
on Tuesday that the reported interest of Enel had just accelerated
existing plans for a merger of the two companies.
"We had already made a lot of progress on the project. It
was nearly finished," Mestrallet said.
Mestrallet, who is to become the head of the merged group if the
deal is allowed by the anti-trust services of the European Commission,
announced that plans for the merger would be communicated to the
EU in April.
The tie-up is set to pose a dilemma for the EU Commission, which
has responsibility for vetting takeovers that affect competition
at a European level. It has spoken in harsh terms against energy
market concentration but is also eager to avoid a clash with a
big member state such as France.
On Monday, Italian Prime Minister Silvio Berlusconi had declared
his support for intervention by the EU and Italian Economy Minister
Giulio Tremonti was to meet EU competition commissioner Neelie
Kroes and internal market commissioner Charlie McCreevy on Tuesday
and Wednesday,
A calendar released by GDF and Suez on Tuesday showed that the
proposed merger would be completed at the end of the year. A board
meeting to finalise the merger has been scheduled for late September
and an extraordinary meeting of shareholders in mid-December.
Mestrallet also said he had not been in contact with Enel about
a possible takeover bid and had never spoken with the chief executive
of the group, Fulvio Conti. His comments added to a sense of mystery
about the intentions of the Italian group.
"I don't know Mr. Conti, I have not had the pleasure of hearing
his voice, even by telephone," said Mestrallet.
"There is no Enel project for me," he said.
Shares in GDF closed on a gain of 0.21 percent at 29.03 euros
on Tuesday, while shares in Suez fell 3.26 percent to 30.89 euros.
AFP
02 28 06
Copyright
© 2006 AFP. All rights reserved
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