EU sets out questions to GdF-Suez merger

22-08-2006

The European Commission has set out a provisional list of objections to the proposed €72 billion (£49 billion) merger of French state energy giant Gaz de France with utility Suez.

EU regulators voiced competition concerns over the combining of the two suppliers in Belgium and France.

If the merger goes ahead, GdF and Suez would control more than 90 per cent of Belgium's electricity market and 98.5 per cent of the French gas market.

The EU commission said it had notified both firms of its objections.

But a statement released over the weekend said the commission's initial stance would not prejudge the final outcome of the case.

Both GdF and Suez said they remained confident the merger would win regulatory backing before the final ruling on the merger on October 25th.

Meanwhile, Centrica, the owner of British Gas, could snap up some of coveted assets in Europe if the commission demands a sell off ahead of the merger.

The Times today says GdF may have to offload a 25 per cent stake in Societe de Production Electrique (SPE), Belgium's second-biggest electricity supplier, to meet regulatory approval.

Centrica also owns 25 per cent of the Belgian firm and has the first say on GdF's stake, the Times newspaper reports.


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