EU regulators to study GDF-Suez deal closely

27th February 2006, Comments 0 comments

BRUSSELS, Feb 27, 2006 (AFP) - The European Commission will look at the planned merger between Gaz de France (GDF) and Suez with a close eye to see if it threatens competition in the European Union, a spokesman said Monday.

BRUSSELS, Feb 27, 2006 (AFP) - The European Commission will look at the planned merger between Gaz de France (GDF) and Suez with a close eye to see if it threatens competition in the European Union, a spokesman said Monday.

The merger, involving absorption of Suez by GDF, provoked Rome to object that the deal was an "enormous violation of EU law" aimed at blocking a takeover of Suez by Italian energy group Enel.

Commission spokesman Johannes Laitenberger stressed that it was up to Suez and GDF to notify their merger to the EU competition watchdog if the deal affected markets in more than one EU country, which is likely since both companies have numerous European businesses.

If the merger were notified to Brussels, the commission "will apply the law very stringently and it will look to see whether this operation will give rise to problems", he told journalists.

The announcement of the merger comes only weeks after the commission argued earlier this month that the European energy market was not sufficiently integrated and too concentrated in the hands of a few companies.

Competition commissioner Neelie Kroes said the EU energy market had changed little since the age of national and regional monopolies and threatened action to spur greater competition.

"Persistent concentration is a core problem in the markets," she said.

"So there can be no alternative to meticulous scrutiny of future merger operations," she added.

The commission said that in the coming months it would look at specific cases where gas and electricity markets had in effect been closed to competitors because of long-term contracts and restricted access to transport infrastructure and storage facilities.

In most EU countries, a few companies hold more than three-quarters of the electricity and gas distribution market. A lack of cross-border infrastructure physically limits how much electricity and gas flows between nations, according to the commission.

Copyright AFP

Subject: French news

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