Brussels, 14/11/2006 (Agence Europe) - On Tuesday, the Commission gave its blessing to the marriage between Gaz de France (GDF) and Suez. Although initially concerned that the merger would reinforce the dominant position of the parties on the gas market in France and Belgium, the electricity market in Belgium and the heat networks market in France (EUROPE 9248), the subsequent commitments undertaken by Suez and GDF finally allowed the decision to be made (EUROPE 9270 and 9293). Without these measures, the operation would in particular have put an end to competitive pressure between the two companies in France and in Belgium, noted the Commission, which is particularly pleased at the fact that Distrigaz and SPE have been sold off and that Suez has given up control of Fluxys. These corrective measures are in line with the first findings of the investigation underway into the energy sector, which stresses the importance of breaking up ownership and splitting provision and infrastructure in order to create conditions which are favourable to competition and to allow the sustainable development of the energy markets, the Commission states.
In Belgium, competition problems would have affected the supply of gas and electricity in general, as well as the supply of gas to electricity power stations which run on gas. Moreover, no company would have been in a position to replace the competitive pressure formerly brought to bear by GDF. Given problems faced by competitors trying to gain a foothold in the market, the operation would have allowed the parties to control access to the vast majority of gas imported into Belgium and to control virtually all long-term import contracts. With control of Fluxys, the operator of the network, they would also have enjoyed privileged access to the distribution and storage infrastructure. In France, the operation would have removed the competition exerted by Distrigaz on the gas market and that of Suez on the urban heating market.
Suez therefore proposed to sell off Distrigaz (and particularly its activities in France) and to give up its control of Fluxys. GDF, for its part, will shed its stake in SPE and, in order to answer concerns voiced with relation to the urban heating market, its Cofathec Coriance subsidiary. By committing to invest in various projects, both companies will help to develop infrastructure capacities, so to facilitate the entry of newcomers onto the market and thus promote competition. (ab)