Although the letter of objections that the two groups have received remains confidential, it is thought that the EU is concerned by the impact on competition in the gas and electricity markets in both France and Belgium.
Suez owns Electrabel, the largest electricity company in Belgium, while GdF is a shareholder in SPE, a gas supplier based around Liege. There are also reportedly issues surrounding heating supply in France and gas wholesale in the Low Countries, where Suez has significant assets including majority holdings in the trading operation Distrigaz and distribution company Fluxys.
While a formal response will come later, the two companies admitted that they would work with Brussels to try to come to a compromise. The Guardian newspaper reports that Electrabel, for example, recently sold a site for a new power plant development to E.ON of Germany.
Suez and GdF insist that the merger will be good both for competition and security of supply in Europe, but there remains considerable opposition to the deal – not least in France, where the prerequisite part-privatization of GdF has sparked mass protests from unions and many politicians.
