Following nearly two years of squabbling, this month France’s national gas utility, Gaz de France, finally agreed to team up with the Franco-Belgian utility Suez, to create an energy behemoth with some €72 billion in revenue.
An impressive union, indeed, but some Eurozone observers find the insight the merger gives into the economic policies of French President Nicolas Sarkozy to be the deal’s most interesting storyline.
While some 80% of Gaz de France is currently owned by the French state, the government’s share will be reduced to around 35% in the new, as-yet-unnamed entity, whose creation follows the scuttling of a potential bid for Gaz de France by Italy’s Enel SpA power. Having come to office in elections this past spring boasting of his free-market credentials, the Sarkozy government now appears willing to prescribe a vigorous dose of protectionism to ward off the purchase of one of France’s industrial jewels by a foreign-controlled concern.
In addition to the Gaz de France-Suez deal, in recent months, the Sarkozy government has also made plain that it is seeking a politically appetizing avenue by which to jettison the German engineering firm Siemens from its joint enterprise with France’s nuclear group, Areva. Though Siemens currently owns a 34% stake in Framatome, the sector of Areva charged with the construction of nuclear reactors, its option on the joint venture -- commenced in 2001 -- runs out in 2011. The Sarkozy administration appears intent on exercising an option to buy out that stake to create an all-Gallic energy giant, with the French energy group Alstom and its national collaborator Bouygues, an infrastructure company, stepping into Siemens’ shoes. The move echoes actions taken during Sarkozy’s stint as minister of finance in the government of then-French president Jacques Chirac in 2004, when his office successfully scuttled a move by Siemens to buy stake in Alstom itself, a company that has struggled financially in recent years. (more details)