By Peggy Corlin - 19th June 2006
Brussels is to investigate the proposed merger of Suez and Gaz de France, but the deal could yet be scuppered by French politicians.
European commission competition authorities announced on Monday that they would investigate the proposed merger, pushed through by French prime minister Dominique de Villepin earlier this year.The merger was fast-tracked by the French authorities after Italian company Enel launched a hostile bid for Suez earlier this year.
But the EU probe - the results of which are due in October - could prove unecessary after French politicians rounded on Villepin’s proposal.
French deputies from both left and right have questioned the move - seeing it as back door privatisation of the state-owned GdF - and the French parliament will now not vote on the deal until September.
This will not stop the Brussels probe, however, which will focus on the likely impact of the deal on the Belgian and French markets.
The merger would leave Suez/GdF in control of the majority of gas imports into both countries.
Competition commissioner Neelie Kroes will also look at the likely impact on British, Hungarian and Luxembourg markets.
Villepin had hoped to win parliamentary backing for the deal before the summer, not least because Enel is still interested in Suez.
The Italian company recently approached the French authorities about taking a stake in the merged company after dropping its hostile €50m takeover bid for Suez.
But disagreement among French politicians - notably over the likely increase in gas prices the the merger could cause - has forced Villepin to wait until after the summer recess before seeking approval.
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