Doris Leblond
OGJ Correspondent
PARIS, Sept. 7 -- Gaz de France and Suez, following approval of their boards and shareholders, reported Sept. 3 a merger of equals set to become the largest gas transmission and distribution network operator in Europe, the number two storage and LNG terminal operator in Europe, and one of the three top utilities worldwide.
France's Parliament has voted to privatize Gaz de France, and France will hold a 35% stake in the merged Franco-Belgian group, to be called GDF SUEZ, which will have a combined stock market capitalization of €90 billon, revenues of €72 billion, a cash flow of €11.4 billion, and less than €13 billion in net debt.
Current Suez Chairman and Chief Executive Gerard Mestrallet will be chairman and chief executive, running the group jointly with Gaz de France Chairman and CEO Jean-Francois Cirelli as vice-chairman and president.
The merger should become operational by mid-2008.
The EU Commission's late 2006 approval requires Suez to divest its 57.25%-owned gas marketing subsidiary Distrigaz and its 57% stake in Belgium gas transport company Fluxys. Suez will divide Fluxys into three entities, keeping a majority stake only on the Zeebruggen methane terminal. Fluxys will operate the Zeebrugge hub.
Suez also will spin off 65% of its environmental division. GDF SUEZ will control it through a shareholder pact involving the remaining 35% to be negotiated.
Gaz de France will relinquish its 25.5% stake in Belgium electric power company Societe Publique d'Electricite and will divest Cofatech Coriance, its district heating subsidiary.
Suez and Gaz de France have requested an extension of the EU's divestment deadline, which ended last week.
