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24 January 2007 - The troubled merger between Gaz de France (GdF) and French utility Suez took a new turn last night, with GdF announcing a new timetable for the €78bn ($101 bn) deal, saying shareholders would be called to an extraordinary vote on June 25.
The significance of the announcement is that one of the first decisions taken by any new government appointed after France's presidential election in April or May will be on the controversial privatization of GdF.
Over the last year the merger deal has stalled a number of times amid fierce political and union opposition. Furthermore, a court ruling last November threw the deal into doubt by forcing a delay until July, i.e. until after the presidential elections, raising concerns that a future government could further hinder the deal.
Last week, Francois Pinault, the billionaire businessman, stepped back from the Suez saga, as his family investment group, Artemis, announced that conditions were not conducive to allow it to bid for the French energy and environment group. However, he did leave the door open to re-enter, saying he believed an alternative to the GdF/Suez deal could still be found.
The AMF, France's stock market regulator, acted to bar Pinault from bidding for six months, although loopholes in current rules would still allow him to bid if there were significant changes to the situation, environment or investor base of the parties involved. This could include any decision to abandon plans for a straightforward merger with GdF.
Other possible obstacles to the deal also appear to have receded. Earlier this month, the investment group Knight Vinke, which had been pushing for a break-up of the water and energy group, sold its stake to Belgian billionaire Albert Frère, who is Suez's leading shareholder.
Suez directors last week reiterated their support for a deal with GdF.
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