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| Version 5 | Version 6 |
|---|---|
| French utility firms agree merger | French utility firms agree merger |
| (about 3 hours later) | |
| French utility groups Suez and Gaz de France (GDF) have agreed to merge to create one of the world's largest energy firms, worth 70bn euros (£47bn). | French utility groups Suez and Gaz de France (GDF) have agreed to merge to create one of the world's largest energy firms, worth 70bn euros (£47bn). |
| Both firms have been trying to merge since 2006, but a final deal was agreed over the weekend following meetings between the boards of both firms. | Both firms have been trying to merge since 2006, but a final deal was agreed over the weekend following meetings between the boards of both firms. |
| Under the terms of the deal, the French government will hold more than 35% of the new firm - to be called GDF Suez | Under the terms of the deal, the French government will hold more than 35% of the new firm - to be called GDF Suez |
| The deal has been opposed by unions, which fear it will cause job losses. | The deal has been opposed by unions, which fear it will cause job losses. |
| The French government currently owns 80% of GDF, and was keen to prevent Suez from merging with the Italian energy company Enel. | The French government currently owns 80% of GDF, and was keen to prevent Suez from merging with the Italian energy company Enel. |
| Shares in Suez and Gaz de France fell 3% and 2% respectively in Paris in response although this followed an 8% rise last week on rumours that a deal was imminent. | |
| Terms | Terms |
| The "merger of equals" deal means that 21 Gaz de France shares will be exchanged for 22 Suez shares, the firms said in a joint statement. | The "merger of equals" deal means that 21 Gaz de France shares will be exchanged for 22 Suez shares, the firms said in a joint statement. |
| SARKOZY REFORMS SO FAR Made overtime pay tax-freeSet 50% income tax ceilingInheritance tax reducedStrikers to give 48 hours noticeForced minimum service during transport strikes | |
| As Suez has expanded far faster than Gaz de France since the original plan was announced in 2006, new terms were needed to do justice to Suez investors, analysts said. | As Suez has expanded far faster than Gaz de France since the original plan was announced in 2006, new terms were needed to do justice to Suez investors, analysts said. |
| Suez will sell off its water and non-energy assets by listing them separately on the stock exchange at the same time as the merger goes through. | Suez will sell off its water and non-energy assets by listing them separately on the stock exchange at the same time as the merger goes through. |
| The merged group will keep 35% of the shares in the separate water and waste management business, while the rest of the shares will go to Suez shareholders. | The merged group will keep 35% of the shares in the separate water and waste management business, while the rest of the shares will go to Suez shareholders. |
| There had been fears that the talks, between Suez and the office of French President Nicolas Sarkozy, could collapse, following disagreement over the terms of the tie-up. | There had been fears that the talks, between Suez and the office of French President Nicolas Sarkozy, could collapse, following disagreement over the terms of the tie-up. |
| Unions fear that it could lead to job losses and there are also concerns that reduced competition may push up energy prices for consumers. | Unions fear that it could lead to job losses and there are also concerns that reduced competition may push up energy prices for consumers. |
| Privatisation | Privatisation |
| The deal has also led to criticism of Mr Sarkozy, who said when he was Finance Minister in 2005 that he would not lower the government's stake in Gaz de France to below 70%. | The deal has also led to criticism of Mr Sarkozy, who said when he was Finance Minister in 2005 that he would not lower the government's stake in Gaz de France to below 70%. |
| The merger will mean the effective privatisation of GDF because the government will not own a majority stake in the merged group. | The merger will mean the effective privatisation of GDF because the government will not own a majority stake in the merged group. |
| The Prime Minister, Francois Fillon, defended the deal. | The Prime Minister, Francois Fillon, defended the deal. |
| "The public sector will have about 40% of the new group. Forty percent of GDF and Suez, I think that is better than 70 or 80% of GDF alone," he said. | "The public sector will have about 40% of the new group. Forty percent of GDF and Suez, I think that is better than 70 or 80% of GDF alone," he said. |