Gaz de France and French multi-utility Suez have submitted a series of proposals designed to overcome objections from the European Commission covering energy markets in France and Belgium as a result of their proposed merger.
The two companies suggest setting up a new competitor in Belgium and in France that will be subsequently sold to a third party.
The new company would hold a portfolio of sales contracts with Distrigaz’s industrial customers in Belgium and France as well as contracts for the sale of gas concluded by Distrigaz and Gaz de France with SPE and supply contracts for some 4.5 bcm along with additional medium-term supply contracts. Storage and transmission infrastructure would also be included. Suez and GdF would preferably sell the new company through an asset swap agreement, they say.
Other measures include the sale of the 25.5% interest in SPE owned by Gaz de France and changes to the corporate governance rules of the companies responsible for infrastructure in France and Belgium designed to reinforce the guarantees of independence of the companies in question. Measures facilitating access to the Zeebrugge hub; a commitment to consult the market before the end of 2007 for the second extension of the Zeebrugge LNG terminal and reinforcement of the North-South transit capacity across Belgium; and new storage capacity are also proposed.
The Commission identified four markets where the merger between the two companies would affect competition, including gas and electricity markets in Belgium and French gas and heating markets, and is expected to announce its decision concerning the transaction by the middle of November.