|
10 September 2007 - The Spanish government fears that the proposed merger between Suez and Gaz de France could lead to aggressive expansion by the new French energy group into southern Europe and it is already preparing its defences against such a threat.
According to confidential documents seen by the Financial Times of London, the Madrid government plans to argue that the high electricity and gas tariffs set by the French state allow GdF to notch up huge profits which could then be used to finance takeover bids.
Spain, which sets comparatively low tariffs, will argue that this constitutes an indirect form of state subsidy, deemed illegal under European Union competition rules.
This will be a new line of objection. In the past, Spain has tried to block takeovers by foreign companies on the basis that they are still state-owned, but the EU has not accepted this argument.
The policy reflects the determination of the government of José Luis Rodríguez Zapatero to avoid a rerun of what happened last year, when it was caught off-guard by a surprise bid from Eon, a German utility, for Endesa, a Spanish electricity company.
"The state-sponsored French merger has clearly been designed so that a combined Suez-Gaz de France can expand southward in Europe," David Táguas, chief economic adviser to Mr Zapatero, told the FT.
The combined Suez-GdF will create one of the biggest energy companies in the world, with sales of more than €60bn ($80bn), rivalling those of Germany's E.ON and RWE and EdF of France. The combined group would be the biggest purchaser and supplier of natural gas in Europe and the fifth largest electricity supplier.
The Spanish government has tried, and failed, to sponsor a merger between Gas Natural, a privatised gas company, and an electricity group in Spain. As a result, it lacks a "national energy champion".
Mr Táguas said Spain was "concerned" about the effect of the French energy merger on competition and liberalisation within Europe. Mr Zapatero's team has reason to be concerned. Suez has been a long-term partner of La Caixa, a Spanish savings bank, in Aguas de Barcelona, a water services company.
More recently, Suez built up a stake in Gas Natural, and is seeking Madrid's approval to raise its shareholding above 10 per cent.
| 
Articles 
| View all PennWell sites | View all PennWell events
Add RSS Feed
