20 September 2007 – The French state will take a so-called “golden share” in the to-be-merged energy group of Suez and Gaz de France to prevent sales of GDF assets like gas infrastructure, Finance Minister Christine Lagarde has said.
A golden share gives the holder veto rights in certain circumstances and can be used to protect a company from possible takeover.
“The government will take a specific share, a ‘golden share’ which will give it the right to block the sale of GDF assets on national territory,” Lagarde told the parliamentary economics committee.
She said the assets in question included gas infrastructure.
After long-deadlocked negotiations, Suez and GDF have agreed to merge into the world’s fourth biggest energy utility by market capitalisation, with the French state retaining a 35.6 per cent stake in the new company.
The chief executive of Gaz de France, Jean-Francois Cirelli, told the parliamentary committee he saw “no reason” why the European Union authorities would object to the government taking a golden share.
In response to fears from consumers and unions about a possible increase in energy prices after the link-up, Lagardere said that state-regulated prices would continue beyond 2010.
Lagarde said the French government had agreed to the takeover of GDF by Suez, because Suez was a “potential prey” for other players on the energy scene, including Italian and German companies.
The former French government of Dominique de Villepin had launched the planned merger in early 2006 when Suez was being chased by Italian energy utility Enel.
Lagardere said another option, to merge GDF and electricity utility Electricite de France, had been ruled out because it would create competition concerns.