Suez sets out terms for EU merger approval

29th August 2006, Comments 0 comments

PARIS, Aug 29, 2006 (AFP) - French energy group Suez does not want to sell its Distrigaz distribution unit, Elyo heating business, or Belgian pipeline unit Fluxys to allay EU competition concerns over its merger with Gaz de France, its chief executive Gérard Mestrallet said in an interview Tuesday.

PARIS, Aug 29, 2006 (AFP) - French energy group Suez does not want to sell its Distrigaz distribution unit, Elyo heating business, or Belgian pipeline unit Fluxys to allay EU competition concerns over its merger with Gaz de France, its chief executive Gérard Mestrallet said in an interview Tuesday.

But GDF is prepared to sell its 25 percent stake in SPE, the Belgian electricity generator, said the state-controlled gas company's chief executive officer Jean-François Cirelli.

In an interview with French financial daily Les Echos, the two CEOs also ruled out getting involved in a project which would lead to them separating their transport networks.

Mestrallet said: "If the disposal of assets is imposed on us in France or in Belgium, we will try after that to acquire their equivalent in other European markets, so that the group retains the same size and industrial presence."

Suez is thought to be eyeing Spain and eastern Europe, said the Financial Times, which also participated in the interview.

The European Commission has given the two French companies a deadline of September 1 to respond to its objections to their proposed merger, as its study found the deal would distort competition in the French and Belgian energy markets.

The FT reported the two French bosses as playing up the threat of increased competition from Gazprom, arguing that the Russian energy giant's recent partnership agreement with an Algerian state-controlled gas group Sonatrach will impact European energy prices.

Asked about Gazprom and Sonatrach's deal to work together in liquefied natural gas and consider joint bids for foreign assets, Mestrallet said: "This deal between (these) two historic suppliers of GDF and Suez could have heavy consequences for European customers."

"In the near term, it shows that we, as clients, were right to bulk up. In this industry, the bigger you are the better you can negotiate," he added.

Cirelli said Gazprom would soon sell gas directly to European customers. But he sought to dispel rumours that Gazprom might bid for GDF.

"Alexei Miller, the chairman of Gazprom ... has assured me that he has no intention of buying GDF or GDF combined with Suez," he said.

The Suez and GDF bosses also hinted they might sweeten the merger deal for Suez shareholders, who are growing dissatisfied with the terms: a one-for-one share swap and a special 1 euro dividend.

Copyright AFP

Subject: French news

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