euro|topics - The GDF-Suez merger under criticism from Europe

Main focus of Tuesday, September 4, 2007

The GDF-Suez merger under criticism from Europe

Eighteen months after the project was first mentioned, Gaz de France (GDF) and Suez agreed on the marriage of these two French companies on Sunday September 2nd. The group formed at the end of the integration process will be one of the world's foremost in the sector. 35% of it will be held by the French State. The press fears that, apart from France, Europe may be losing out.

Le Monde - France

"Announced in February 2006 by the Prime Minister Dominique de Villepin, the Gaz de France and Suez merger is finally due to see the light of day in 2008.This is a happy ending", rejoices the daily in its editorial. "We can of course regret that the European States are incapable of together painting tomorrow's energy landscape. But in this situation dominated by an each to his own philosophy, France has done quite well for itself. With EDF, Total and Areva, it already had three world heavy weights. No other country in the European Union can say as much. ... The shareholders of the new ensemble will have to prove that GDF Suez is a good deal, not just for France... but for consumers too. It is also by the cost of their future bills that the French will judge this merger." (04/09/2007)

Le Soir - Belgium

Joan Condijts is concerned about the consequences of this merger for Belgium and notes that "The French president has nationalised Electrabel [Belgian electricity]. Or pretty much so, anyway. Such is his right too: by merging Gaz de France with Suez, the mother company of Belgian electricity, the Elysée's lodger has allocated himself 35% of the new ensembles' capital. Such, once again, is his right. The motivations that pushed him to this are however questionable. The French Republic has acted this way out of nationalism. The Italian electricity provider, Enel had threatened to raid Suez (with a French accomplice, Véolia). 'Aaaaghh', came the choking cry from the Elysée ... .The red white and blue French patriotism thus led to the black, yellow and red nationalisation of gas and electricity. ... Quick! a Belgian government and an energy policy..." (04/09/2007)

Der Standard - Austria

According to Stefan Brändle, the merger between Gaz de France and Suez constitutes a harsh blow to a common European energy policy: "The GdF-Suez alliance will only serve to cement national borders within Europe's energy policy. It's almost as if every major EU member were to build its own Airbus. Against US rival Boeing this strategy would be as short-sighted as the French energy fusion is against top Russian producers like Gazprom. The French contend that the energy sector is governed by its own set of rules - in particular that of national independence. But ultimately France is harming itself by creating national energy companies that impede the formation of true 'European champions' and the construction of a pan-European answer to Vladimir Putin's energy imperialism." (04/09/2007)

Le Temps - Switzerland

Frédéric Lelièvre considers that "Paris is in fact conforming to a growing presence of States in the energy sector. Did Spain not recently prevent the takeover of its local energy provider by the German E.ON ? Does the Russian giant Gazprom serve interests other than those of the Kremlin? Does Washington not defend its champions against any attempt of control from abroad? The concentration of the energy market is little by little setting up an oligopoly situation, notes Eric Défago from Gaznat. The president of French-speaking Switzerland's supplier does not fear an immediate impact on prices, already sustained by a lack of balance between supply and demand. In the medium-term, however, he rules nothing out. The State reasoning justifying current mergers is running a high risk of distorting prices for blatantly political reason in the future." (04/09/2007)

Süddeutsche Zeitung - Germany

Michael Kläsgen analyses the role of the French president in the merger, which took 18 months to prepare. "Nicolas Sarkozy, who wasn't initially involved in the surprise manoeuvre and distanced himself from the move, could have turned the tide and advocated a European solution - especially given that the plans for a merger were at a dead-end. But Sarkozy adopted a different approach. He got involved in the negotiations, gave instructions and personally engineered a compromise with major Suez shareholders. He had only one goal in mind: the creation of a French company that would dominate the European market and which was protected against hostile takeovers. To this end the state retains a blocking minority in the new GDF-Suez entity. The fact that he has in effect partially nationalised the formerly private Suez demonstrates how far Sarkozy was willing to go. Among other things this violates the principles of Europe's single market." (04/09/2007)

» To the complete press review of Tuesday, September 4, 2007

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