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EU says GDF, Suez must sell assets or reconsider merger plan

Competition

The European Union asked Gaz De France SA and Suez SA to sell assets including holdings in Belgium or reconsider their plan to merge, EU Energy Commissioner Andris Piebalgs said. „We have asked something. We don't know what the companies will answer,” Piebalgs said on the margins of a conference in Cernobbio, Italy. The companies must decide, „do they agree, or do they decide not to merge. It's up to them now.” French Prime Minister Dominique de Villepin announced the proposed € 33.3 billion ($42.9 billion) merger in February amid concern that Rome-based Enel SpA was interested in buying Suez. Last month, EU antitrust regulators expressed concerns about the planned transaction, citing competition problems in Belgium's natural-gas and electricity markets. „For generation you need a lot of participants to get the best prices for the consumer,” Piebalgs said. The combined company's stakes in Distrigaz, Belgium's biggest natural-gas distributor, and Fluxys, the manager of Belgium's natural-gas grid, may also be in a position to hinder competition in Belgium's gas network. „It's electricity generation, but it's also the gas,” Piebalgs said. „There is also Distrigaz, there is Fluxys, so there are a lot of things.” The commissioner said he expects a response from the companies around the middle of the month. (Bloomberg)

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