A merger has finally been agreed between the French utility groups Gaz de France and Suez, creating one of the the world's biggest energy giants. The deal was hammered out late on Sunday night after weekend talks at the offices of French President Nicolas Sarkozy. Suez boss, Gerard Mestrallet, said: "In uniting Gaz de France and Suez, we have an historic opportunity to create one of the best energy companies in Europe, a major player who will have a key role in the consolidation of Europe's energy sector."
The French state, which was keen to avoid GDF merging with a foreign company, will have a 35 per cent stake in the new company. GDF-Suez will have a turnover of 72 billion euros and a market value of 90 billion.
Finance Minister Christine Lagarde welcomed the fact that the state would now have a significant stake in two major energy players, the other being Electricite de France. But the unions are not impressed. Two years ago, when he was finance minister, Sarkozy vowed not to let the state's share of GDF drop below 70 per cent. Union chief, Jean-Francois Lejeune, says whenever the energy sector has been privatised, it has resulted in a lowering of standards of service and a rise in prices. "That", he says, "is hard to accept."
Shares in both companies dipped on news of the merger, although they did gain eight per cent last week on rumours that a deal was near.
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