The European Commission has approved the 42.1 billion euro merger between the giant French utility companies Suez and Gaz de France. To get approval they have agreed to sell certain parts of their businesses that might have impeded competition.
EU competition commissioner Neelie Kroes said they had negotiated with the two companies to ensure consumers were protected: “We indeed approved the merger – big players coming together. We had to investigate this merger plan and we had to take the decision. That indeed means a big step forwards for consumers and business customers, with our remedies, otherwise it would have been a risk and now the Commission is aware that it can be in the customer’s favour at the end of the day.”
The French government currently owns 70% of Gaz de France. Its stake will be cut to just over one third of the merged company. This merger comes against the background of a concerted effort by the European Commission to create an EU-wide power and gas market and to get national governments to give up control of energy regulation.
The French government brokered the merger in February to block an attempt by Italian utility Enel to buy Suez. That led to criticism that Paris was breaking EU free-market rules by closing the country’s energy market to outsiders. The deal has still to be approved by shareholders.