Suez, GDF defend merger; cut off talks with Enel

20th March 2006, Comments 0 comments

PARIS, March 21, 2006 (AFP) - French state-controlled Gaz de France (GDF) and the Suez utilities group it is seeking to absorb said on Tuesday that they had "broken off" talks with Italian energy group Enel, said to be considering a hostile bid for Suez.

PARIS, March 21, 2006 (AFP) - French state-controlled Gaz de France (GDF) and the Suez utilities group it is seeking to absorb said on Tuesday that they had "broken off" talks with Italian energy group Enel, said to be considering a hostile bid for Suez.

The previously undisclosed "indirect contacts" with the Italian electricity giant had been "broken off", Suez told AFP after the talks were revealed in an article in French business daily Les Echos.

GDF, contacted independently, confirmed the report.

Enel boss Fulvio Conti was expected to voice his concerns about the deal on Tuesday in Brussels to EU Competition Commissioner Nellie Kroes.

Rome has accused France of seeking to block Enel from bidding for Suez by charging Gaz de France to make pre-emptive offer for the French company.

The heads of Suez and GDF said Monday they had made the case for the planned merger of their two enterprises to Europe's top regulator.

"We have started to present our merger because it is an operation that will clearly need to be notified to and authorised by the European Commission," Suez chief executive Gerard Mestrallet told journalists after the meeting.

He described the talks with EU Competition Commissioner Nellie Kroes as a "first constructive meeting", which were also attended by GDF chief executive Jean-François Cirelli and Suez board member and former European commissioner Etienne Davignon.

"Commissioner Kroes explained that once the planned concentration has been notified to the Commission under the EU merger regulation, the commission will assess the likely impact on effective competition in the various sectors affected by the transaction within the European Union," the EU executive said in a statement.

The deal has sparked competition concerns at EU headquarters here because Rome claims it was put together by Paris in order to block Italian group Enel from making a bid for Suez.

The visit to Brussels of Cirelli and Mestrallet came only a day before Enel boss Fulvio Conti was expected to voice his concerns about the deal to Kroes at a meeting on Tuesday.

Copyright AFP

Subject: French news

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