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Energy groups Suez, GDF only interested in "total merger"
AFP
PARIS
Petroleumworld.com 06 16 06
The French gas group Gaz de France and Suez, an energy and utilities company, stressed Thursday that tie-up plans could only lead to a "total merger between the two groups", in another snub of the Italian energy group Enel.
"No other path" represented a real option, the bosses of GDF and Suez, Jean-Francois Cirelli and Gerard Mestrallet said in a joint statement.
A merger is the only viable one for the two companies "that preserves their industrial stakes, maximizes their synergies and defends the interests of their staff and clients in the short and medium term," the statement said.
The French government has sought to foster a merger of state-controlled GDF with Suez in order to ward off hostile advances from Enel, which is interested in Suez's Belgian electricity unit, Electrabel.
But on Wednesday, deputies from the French governing UMP party sent a strong signal that while a cross-shareholding by GDF and Suez could be considered, they were unlikely to approve a full merger.
That would require legislation allowing the government to reduce its stake in GDF below 70 percent, and lawmakers were wary they would take the heat when gas prices subsequently increased.
There is nonetheless a widespread feeling that, given consolidation in the European energy sector, the two groups will have to seek out strategic partners.
The stakes are high: Suez is capitalised at 37.6 billion euros (47.4 billion dollars) and has 161,000 employees, and Gaz de France is worth 25.0 billion euros and employs 53,000 people.
French Prime Minister Dominique de Villepin has insisted in the last few days that he intended to press ahead with a bill to reduce the state's holding of 80.0 percent to about 35.0 percent, thereby privatising GDF.
The change is a condition for the plan for Suez, a company privately owned through the stock exchange, to absorb GDF.
The scheme emerged in February when Enel appeared about to make a hostile bid for Suez to take control of Electrabel, the leading supplier of electricity in Belgium.
The Suez-GDF deal was widely seen as a way of making Suez too big for Enel to swallow. Suez and GDF said however that they had been working on the plan for some time.
AFP 15 1844 GMT 06 06
Copyright ©2006 AFP. All Rights Reserved.
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