French energy companies Gaz de France and SUEZ have outlined plans of their long-awaited merger which will increase the reach of both company's current international operations, according to a joint release put to market on September 3.
It is believed, if both groups approve the plans, the transaction will close as early as 2008, when a new global energy supplier with a combined stock of €90bn and revenue of €72bn will be formed.
The companies say their merger will help ensure energy supplies in Europe by becoming Europe's leader in energy services and largest importer of LNG.
"In a context of increasing European energy dependency, the new group will foster dialogue with the energy-producing countries with the aim to conclude new agreements and to develop its Exploration-Production activity," the statement says.
Both Gaz de France and SUEZ have followed strong parallel paths of infrastructure and industrial growth in recent years, developing new electric generation capacities and carrying out development in LNG in the US and Europe.
Under the proposed merger, Gaz de France will carry out energy sales while SUEZ will look after financial and human resource issues.
The merger is proposed on 21 Gaz de France shares for 22 SUEZ shares. Gerard Mestrallet will be installed as CEO, running the company with vice chairman and president Jean-Francois Cirelli.
Reported by Penny Jones
