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Suez and Gaz de France agree to merge

Suez and Gaz de France agree to merge
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After 18 months of delays, a merger has finally been agreed between the utility group Suez and the French state-owned energy firm Gaz de France. Board members gave the green light to the move which creates a European power giant, with a value of 90 billion euros. Unions say it amounts to a privatisation of GDF. But French Finance Minister Christine Lagarde has stressed the state will maintain significantly more than a blocking minority of 33.3 percent in the new company.

The merger was originally pushed forward by France’s previous conservative government to prevent a foreign takeover of Suez, the company that built the Suez Canal. Unions, however, remain firmly opposed to the deal. Jean-Francois Lejeune of “Force Ouvriere” says energy privatisations spell a lowering in service standards and a rise in prices.

Accused by unions of abandoning earlier pledges to keep GDF public, French President Nicolas Sarkozy laid down terms for the merger which has seen Suez back down over control of its historic water and waste assets.