A planned merger of French gas utility Gaz de France (GDF) and private energy group Suez faced fresh complications on Thursday following a report that French tycoon Francois Pinault and Italian group Enel had prepared a multi-billion-euro offer that would derail the deal.
A report in the newspaper Les Echos that Pinault was ready to pay 18 billion euros (US$22.6 billion) for Suez's water and waste management jolted parliament here.
Communist and Socialist deputies demanded that legislation allowing for the privatization of GDF, which is necessary for the merger to take place, be withdrawn or its consideration by parliament suspended.
Les Echos said Pinault had joined forces with Enel, which is interested in energy assets owned by Suez but has been blocked by the French government. French authorities stepped in last February to thwart a potential Enel move with a plan for Suez to absorb GDF.
According to Les Echos, Pinault would buy environmental service units owned by Suez while Enel would split off the French group's energy activities, notably Belgian electricity company Electrabel.
"Suez environment is not for sale," a spokesman said when questioned on Les Echos report.
In Italy, an Enel spokesman said the company was no longer considering a joint assault with Pinault.
The newspaper said the move by Pinault, who is close to President Jacques Chirac, could disrupt French efforts to merge Suez and GDF. Legislation opening the way for the effective privatization of GDF by Suez has passed through the National Assembly and now awaits approval by the Senate and Chirac.
News that Pinault may be in the market for part of Suez came as directors at GDF held an emergency meeting to consider new conditions for the merger imposed by EU authorities.
The European Commission is seeking more concessions from the groups in exchange for its endorsement of the merger, a source close to the matter said on Wednesday.
The commission has already warned the companies it would not approve the deal unless business divestments and other measures were taken to ensure they would not have a dominant position in Belgium and France.
Both firms sent the commission a number of proposals on Sept. 20, including the sale of GDF's 25.5 percent stake in Belgian electricity group SPE.
The EU panel had been due to make its final ruling on the merger by Nov. 17 but decided on Thursday to extend its decision to Nov. 24, giving no reasons for the move.
While a source close to GDF has said the group maintains it has done enough to satisfy the commission, analysts said it was unlikely that it will abandon the merger with Suez given that the government -- still the majority shareholder -- strongly backs the tie-up.
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