EU examines GDF-Suez deal amid calls for strikes

22nd September 2006, Comments 0 comments

BRUSSELS, Sept 21, 2006 (AFP) - The European Commission on Thursday began examining proposals from French energy groups Gaz de France and Suez aimed at removing competition concerns over their planned tie-up.

BRUSSELS, Sept 21, 2006 (AFP) - The European Commission on Thursday began examining proposals from French energy groups Gaz de France and Suez aimed at removing competition concerns over their planned tie-up.

Just before a Wednesday midnight deadline, Suez and GDF came up with a raft of proposals to satisfy the EU competition authorities, including selling assets and establishing a new competitor in Belgium and France.

In France meanwhile, trade unions called for a day of strikes and demonstrations in October to protest the controversial deal, which will see state-controlled GDF absorbed by private, stock market-listed Suez.

The plan requires approval from both the EU Commission, the top anti-trust watchdog in the EU, and the French parliament, as well as from Suez shareholders.

The centre-right French government says it is now confident of winning a parliamentary majority in a vote on the deal on October 3.

Leading French trade unions CGT, CFE-CGC and the CFTC have called for action on this day "to fight the destruction of the public service", with a street rally planned for Paris and stoppages predicted throughout France.

GDF will be privatised as a result of the deal, with the state holding in the company set to fall from 80 to 34 percent.

GDF and Suez presented their competition proposals in Brussels in the nick of time, leading the European Commission to announce a delay in delivering its judgment on the revised plans, putting the date back from October 25th to November 17.

"We have received the remedies from the two parties and we are going to examine them closely," said the European spokesman on competition issues, Jonathan Todd.

On or before November 17 Competition Commissioner Neelie Kroes will announce the acceptance, rejection or conditional acceptance of the merger scheme.

The Suez-GDF measures, put forward as a "remedy", come in response to the concerns expressed by the Commission on August 19 that the proposed tie-up created dominant positions for the companies in four markets: gas and district heating systems in France, and gas and electricity in Belgium.

The plan for GDF to be absorbed by Suez emerged after Italian group Enel said it was considering a takeover bid for Suez, mainly to acquire assets in Belgium.

Analysts saw the GDF-Suez merger as a protectionist move by the French government to create a gas giant which would prevent Suez falling into Italian hands, but Paris and the companies said that the plan had been under consideration for a long time.

In a joint statement the two groups outlined a series of measures they hope will appease all parties.

They proposed firstly to create a new competitor in Belgium and in France by setting up a new company that would be subsequently sold to a third party.

They also proposed the sale of the 25.5-percent interest owned by GDF in the capital of Belgian electricity company SPE, that has up to now been Suez-owned Electrabel's main competitor.

The groups also propose changes to the infrastructure in France and Belgium designed to strengthen guarantees of independence for the companies involved.

Lastly, they would sell the Cofathec heating networks, a subsidiary of GDF.

Copyright AFP

Subject: French news

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