French utility groups Gaz de France and Suez have agree to merge, creating a global energy firm. After 18 months of delays, board members met last night to approve a new deal which prevents a foreign takeover of Suez, while increasing GDF’s power assets.
The fusion will create the world’s fourth largest energy giant with an estimated turnover of 80-billion euro. France’s Finance Minister Christine Lagarde said: “Having significant stakes in two major energy players is a good thing which will give the state much more bargaining power when it comes to negotiations.”
The French government will hold more than 35 percent of the new firm – to be called GDF Suez. But that has failed to appease some unions who say the deal amounts to a privatisation of state-controlled GDF. Jean-Francois Lejeune of Force Ouvriere fears a lowering in service standards and a rise in prices.
Under the new deal, Suez will abandon the majority of its water and waste management assets to preserve what some analysts describe as a politically acceptable merger of equals.