Suez and Gaz de France finally come together
Just to show how slowly these things can go, the merger of French utility companies Suez and Gaz de France (GDF) was announced as likelihood two and a half years ago, in February 2006, as we reported. The deal finally got shareholder approval last week. The new company will be the world's #2 utility, with holding in gas and electric. #1 is also a French company, EDF, and Germany's E.On slips to #3.
As we reported then "A $24 billion company, GDF is mostly government-owned. It has operations in France and in a number of other countries in Europe, Asia, Africa, and Latin America. According to an AP report ( "Suez, Gaz de France to Merge", 2/25/2006), French Prime Minister "Villepin said Suez and GDF, as Gas de France is known, had been discussing for months a deal to bring together their 'close and complementary' activities in energy production, transport and distribution."
The deal was arranged as xenophobic panic reaction to a threatened bid by Italy's leading utility company Enel to take over Suez. Suez is a 150-year old company, with its origins n building the Suez Canal. It spun off its water and waste division in 2007 as Suez Environnement (though it still holds a large minority position). , Along with natural gas and liquefied natural gas, it has over 200 million customers worldwide.It is a major owner and operator of nuclear plants, and is starting to be a growing player in renewables.
The combined company, to be called GDF Suez, will be valued at over $85 billion.
It all comes down to setting costs and prices. A Guardian article ("Suez, GDF shareholders back birth of energy giant", 7/16/07) quotes a French spokesman as saying "In a market pegged to oil prices, it is important to secure your supplies and the bigger you are, the more secure your supplies will be... the better the prices you can negotiate."
We see the trend to concentration resuming, with ever larger utilities spreading risk between a number of sources of energy and having the capital available for developing alternatives.
8:57:28 PM 
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