The European Commission has approved the highly controversial merger of Gaz de France and Suez after the companies agreed to compromises that assured the maintenance of healthy competition within their markets.

In a press statement, The European Commission said that it has approved, under the EU Merger Regulation, the merger of GDF and Suez following an in-depth investigation.

The Brussels authority had originally ruled against the combination of the two major Gallic utilities on the ground that it would seriously harm competition in certain markets, most notably the Belgian residential energy sector. However, final EU approval has now been secured following further assurance from GDF and Suez that certain assets will be divested and other arrangements are made.

Key among the additional compromises was the divestiture of Distrigaz and SPE, and Suez relinquishing its control of Belgian network operator Fluxys. However, despite the extra divestments, the combined French energy firm will still be the second largest utility in Europe.

Competition Commissioner Neelie Kroes stated, The Commission has insisted on far-reaching remedies in this case so as to ensure effective competition in the Belgian and French energy markets. Our intervention in this case is part of our action to ensure that there is effective competition in the newly-liberalized energy markets to the benefit of consumers and business.