Gaz de France Suez
The Group produces, transports, distributes and sells gas, electricity and services to 14.7 million customers (individuals, companies, local authorities) in Europe. Gaz de France Suez operates across the whole gas industry chain and is one of Europe's largest players in the gas industry.
Gaz de France - Suez merger creates an energy giant
The global energy market has seen several emerging giants over the last decade. The market, used to be dominated by British Petroleum, Chevron, ExxonMobil etc, saw new leaders such as China National Petroleum Corporation (CNPC), Lukoil, Gazprom (both Russian) and Petróleos de Venezuela, S.A. (PDVSA). These companies have grown largely through mergers and acquisitions. Adding to the list of such mergers is Gaz de France (GDF) and Suez.
The tie-up was an arduous process as the deal was not to the liking of the opposition Socialist Party and trade unions. The French government however has taken a positive stance and believes that the merger would help establish a national oil company similar to CNPC and PDVSA which would enable them to secure business worldwide.
It is reasonable to expect European energy companies to seek similar tie-ups in their attempts to ensure the regional energy security. Europe is at the mercy of external energy suppliers such as Gazprom, which is known to use its energy supply as an effective bargaining tool. Readers may recall Gazprom sending a chill throughout Europe when Yushchenko’s Ukraine fell foul with Russia. Larger state energy companies such as GDF-Suez, the new entity, are expected to weather such storms better.
The merger itself however is viewed as a blow to Europe’s plans to open the sector to increased competition. The deal is expected to make GDF-Suez Europe's largest buyer and seller of natural gas, as well as its biggest natural gas distributor. Making its intentions clear, GDF – Suez announced its interest in Britain’s nuclear power operator British Energy. Expect more acquisition endeavours by the new giant on the block.
The French government will be the biggest single shareholder, with 35.6 percent of the capital, followed by Belgian investment company Groupe Brussels Lambert, with 5.3 percent.