The merger of French energy companies Gaz de France and Suez has created a new national ‘champion’, triggering accusations of protectionism from some of the country’s neighbours. But the Commission expects the new giant to respect its obligations under EU competition law.
On 22 July, GDF Suez appeared as a listed company on global stock markets as the new third largest gas and power provider in the world.
The French government, with an 80% share in GDF, will remain a majority shareholder in the new company, which many consider to be essential for the country’s energy security.
But the merger has raised concerns in France about impending job losses and higher energy prices. It also comes at a potentially awkward moment for Brussels, where plans to further liberalise the EU’s energy market were put forward in September 2007 (EURACTIV 20/09/07). Currently the subject of a heated debate between Council and Parliament, the so-called ‘third energy liberalisation package’ is designed to increase cross-border competition in the Union’s electricity and gas sectors while lowering prices for consumers.
But the Commission is downplaying fears that the merger will lead to anti-competitive behaviour. There is “no reason to believe” that GDF Suez will contravene their legal obligations, said the EU’s spokesperson on competition issues Jonathan Todd on 23 July.
The merger was the subject of an in-depth investigation by the Commission’s competition authorities, which in November 2006 approved the deal under the condition that the companies sign up to stipulations to prevent market abuse.
Despite the EU executive’s stamp of approval, the swift conclusion of the merger agreement by former French Prime Minister Dominique de Villepin earlier in 2006 led to accusations of French “economic patriotism” by Rome, after the Italian energy giant Enel’s bid for Suez was countered by state-backed GDF (EURACTIV 27/02/06).
Meanhwile, attempts by the Spanish government to require that all mergers in the energy sector be pre-approved by its national energy regulator were shot down last week by the European Court of Justice (EURACTIV 18/07/08).
Spain’s Finance Minister Pedro Solbes reacted to the ruling by calling on the EU to clarify the conditions under which national governments can intervene and influence cross-border mergers in the energy sector.