According to the Financial Times, when the French government initially put forward the merger plan in 2006, it outlined a share-for-share swap, a deal that would require the companies to have similar values. Nicolas Sarkozy, the current French president, is now thought to be considering Suez’s plan.
However, according to AFX News, Suez has an added incentive for shedding its stake in the Belgian firm, which is thought to be worth E3 billion. The publication reported that if the merger between Suez and Gaz de France (GDF) was to go ahead, the European Commission would have probably required Suez to divest its Distrigaz interest in order to comply with competition regulations.
The merger between GDF and Suez has been on the cards for some time, but has hit a number of setbacks along the way. The industry is speculating that Suez’s plan to divest its Distrigaz stake is intended to speed up the process.
According to AFX News, fellow French utility Electricite de France (EDF) could be considering acquiring the 60% stake in the Belgian gas distributor. The publication cited Pierre Gadonneix, the utility’s chief executive, as confirming that EDF would be prepared to purchase gas assets divested as a result of the GDF-Suez merger.
