Suez-deal blow to Belgian energy

By Tim King

Date: 09/03/06

The European Commission should impose conditions on any merger between Suez and Gaz de France (GdF) to ensure that some form of competition survives on the Belgian energy market, says the Belgian businessman and energy specialist Philippe Bodson.

The merger, brokered by the French government, was announced 12 days ago as a pre-emptive strike against a bid for Suez by the Italian energy giant Enel.

The Belgian electricity market is dominated by Electrabel, the former national monopoly, which is now owned by Suez. There is some competition from SPE, but one of its shareholders is GdF. So a merger between Suez and GdF, unless the Commission imposed divestments, would eliminate the "small steps" towards competition on the Belgian electricity retail market.

Bodson knows parts of the Suez group well. He was head of Tractebel, the Belgian energy company that was absorbed into Suez, for ten years to 1999, when he was ousted by Gérard Mestrallet, the current Suez boss. He was also on the board of Societé Genérale, when that was taken over by the then Suez Lyonnais des Eaux and he remains a director of Fortis.

Bodson said that the Suez-GdF merger made sense in that a link up between gas and electricity companies was a logical step. But he strongly disapproved of the dominance of the French government in the merged entity, pointing out that the share-swap had been structured to give the government a controlling stake.

"I think it's the renationalisation of Suez, instead of Gaz de France being denationalised," Bodson said.

See Viewpoint, Patriotism - the undoing of the internal market

Article takes a look at the possible impact of the planned merger of energy companies Suez and Gas de Farnce (GdF) on the Belgian electricity retail market.