The merger of Gallic energy heavyweights Gaz de France and Suez has been approved by the French constitutional court but on the proviso that it does not happen before July 1 next year, which experts say could destroy the deal.
Gaz de France and Suez had hoped to accelerate the merger process after initial constitutional issues regarding the size of the French government’s stake in the former had been resolved through fresh legislating.
However, the highly controversial deal has suffered from a subsequent series of setbacks since winning government backing which has thrown the merger into doubt.
A couple of weeks ago French unions were granted a delay to allow them to examine the ramification of the merger more closely. Unions are concerned that the combining of the two energy giants would inevitably result in job cuts, while opposition MPs are also worried that the deal would distort competition in the French energy market.
However, it is the latest legal development regarding the issue that has been described by many as a potential deal breaker. The French constitutional court has ruled that the merger can go ahead but not for another seven months.
The determination pushes the completion date past the French presidential elections, which could bring a completely contrasting political will to bear on the matter. As a result, many analysts are now predicting that the merger will not happen as, put simply, if the Socialist Party wins the presidential election, the merger will be blocked.