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GDF Suez, Int'l Power in asset swap talks

French power and gas company GDF Suez is in talks with British group International Power about a possible asset swap to expand in growth markets, a person familiar with the matter told Reuters.

There is no detailed timeframe for a possible deal, the source said. “The (GDF Suez) group culture is one of partnerships and asset swaps, not cash deals. The talks are ongoing.”

“International Power is a group that is potentially in line with the strategic development of the group,” the source said.

The Sunday Times reported GDF Suez may make a takeover bid for International Power, while the Financial Times reported on Monday the companies had held discussions about creating a partnership involving foreign assets.

GDF Suez and International Power had no comment.

GDF Suez is the world's second-largest utility by market value, after power giant EDF, with a capitalization of some €64 billion, compared with Ł4.9 billion for International Power.

GDF Suez has a limited presence in Britain, while EDF has expanded in the country with the Ł12.5 billion purchase of British Energy.

“This move makes total sense for GDF Suez,” an analyst said.

GDF Suez chief executive Gerard Mestrallet has said the focus of the group born from the union of Suez and state-owned Gaz de France in July 2008 is on organic growth through investments in industrial projects.

But the group has said it would not rule out small or medium-sized acquisitions from time to time.

International Power delivers energy under contract to some 4 million households. It has 45 power plants in Europe, the United States, Asia and the Middle East. (Reuters)