French Prime Minister Dominique de Villepin on Saturday announced plans for a merger between energy and utilities company Suez SA and Gaz de France. The move would block a potential hostile bid from Italy's Enel SpA.
Villepin said that Suez and Gaz de France (GDF), had been discussing a deal for months to bring their "close and complementary" activities together in power production and distribution.
Enel had announced on Wednesday that it planned to make acquisitions in France or Spain.
"Given the strategic importance of energy, the fusion of Gaz de France and Suez seems today to be the most appropriate path," Villepin said.
Villepin did not specify which entity would absorb which to form the new company, nor did he discuss the sensitive issue of privatization. While Suez is in private hands, GDF is 80 percent state-owned. Once the merger is completed, France's government is bound to have a smaller stake in the company.
Parliament, he said, would be called upon for the necessary legislative changes. Under French law, government holdings in state companies cannot fall below 70 percent.
Economy Ministry officials said the French state would retain at least a third of the new company -- giving it a "blocking minority" under French law.
"This would be a mixed capital company. The state will be directly present in the running of the enterprise," said a government official who wished to remain anonymous. "The law will set the rules of the game."
The merger will give France a second important utility company next de Electricite de France, Villepin said.
Italian Prime Minister Silvio Berlusconi said on Thursday that he had discussed the situation with French President Jacques Chirac and Villepin -- and asked that the French government remain neutral in any takeover battle involving an Italian company.
As GDF's majority owner, the government had to approve.
After Villepin's announcement, Italian Industry Minister Claudio Scajola abruptly canceled a trip to Paris scheduled for today to meet French counterpart Francois Loos, Italy's ANSA news agency reported.
Villepin only reluctantly agreed to the plan, fearing political and trade union opposition, officials close to the situation told Dow Jones news service.
At the same time, "Villepin didn't want another Mittal-Arcelor situation," a banker involved in the current talks told Dow Jones.
Netherlands-based Mittal Steel last month launched an unsolicited offer on pan-European steel producer Arcelor that took the French government by surprise.
Suez employee representatives announced on Friday that they were opposed to any hostile bid from Enel, Italy's biggest power company, and would support a friendly deal with GDF.
However, the Communist-backed CGT union said it was hostile to a plan defined "without real public debate." A union statement expressed fears the deal would dilute the public presence, put Suez' 160,000 employees at risk as well as GDF workers and agents working together with GDF and EDF, Electricite de France. It demanded a "real debate" over economic and financial stakes of the future energy sector.
Villepin said that discussions with unions, would begin today with Economy Minister Thierry Breton over the terms of state control "to guarantee public service and the security of France's energy provisions."
SAFETY RISK: The government is working to categorize countries based on their COVID-19 cases and prevention efforts, which would determine quarantine periods The government plans to rank countries based on their COVID-19 risks to determine how to treat tourists and other travelers from those nations once Taiwan reopens its borders, but it is still working out the categories, a top health official told lawmakers yesterday. “We would divide countries around the world into several categories. One category would comprise those countries with very few confirmed COVID-19 cases, such as New Zealand and Palau. Travelers from the countries in this category would only need to practice self-health management,” Centers for Disease Control Deputy Director-General Chuang Jen-hsiang (莊人祥) told a Legislative Yuan seminar hosted by
CASH BOOST: Foreign spouses with residency permits are also eligible for the coupons, which can be bought at post offices or linked to digital payment options Stimulus coupons for Taiwanese and foreign spouses with residency permits can be ordered starting on July 1 and can be used from July 15 to Dec. 31, the Executive Yuan said yesterday. Aimed at boosting domestic spending, the coupons worth NT$3,000 (US$100.04) are to cost NT$1,000. “For our consumers, this is a very good deal as they get three times as much value for their money,” Premier Su Tseng-chang (蘇貞昌) told a news conference in Taipei. While the coupons are to have a wide range of uses, including at department stores, restaurants, book stores, night markets, beauty and hair salons, hotels, and to
SECURITY CONCERNS: The Telecom Technology Center ran black-box tests for the Executive Yuan on devices and software from Chinese, US and South Korean firms Network devices from several Chinese manufacturers are insecure and allow personal information to be leaked, testing commissioned by the Executive Yuan has shown. A variety of devices and software, including apps, from Chinese, US and South Korean manufacturers that are used by government agencies at the central and local level were subjected to black-box testing — in which the functionality of an application is examined without knowing about its internal structure, an information-security official said yesterday on condition of anonymity. The Telecom Technology Center conducted the tests, which simulated cyberattacks, to determine their resilience to the attacks, the official said. The center
Beijing is to ease a ban on foreign airlines starting on Monday next week, changing course one day after the administration of US President Donald Trump demanded that China reopen to US airlines or face curbs on its own carriers flying passengers to the US. Foreign airlines excluded from an earlier pact would be able to operate one commercial passenger flight to China per week, the Chinese Civil Aviation Administration said. It did not name any countries or carriers, but the move opens up a chance for US airlines to return for the first time in four months. While the timing might