France's Financial Markets Authority(AMF) has finally given its approval paving the way for the conclusion of the long-awaited merger between two leading energy giants Gaz de France and Suez, official sources announced Monday.
Following the approval, the two energy groups are expected to hold their first ever joint board of directors meeting on July 22,according to a statement issued by the two companies.
Within the framework of selling 65 percent of the stake of Suez Environment, the water and waste subsidiary, "Suez shareholders will receive a Suez Environment share for every 4 Suez shares," the two groups announced in the joint statement.
"On June 13, GDF and Suez have received the seal of approval (08-126) relating to their proposed merger from the AMF," according to the statement, which said that the two groups will now proceed to formalize their long-drawn merger.
Nevertheless, the shareholders of each of the two energy giants will still have to vote on the intended merger at successive extraordinary general meetings that are scheduled to take place on July 16, according to reliable sources.
Announced in February 2006, the proposed merger is the subject of a new version that was presented to the public in early September after negotiations with the French presidential palace, said a source close to the matter.
The new scheme provides for the exchange of 22 Suez shares for 21 GDF shares and, in order to compensate for the difference in the market value between the two companies, "it has been recommended that a majority of the Suez Environment stake be offloaded through the stock exchange," said the source.
On July 22, the new group, called GDF Suez, will be listed on the stock market.
"July 22 will mark the birth of two world leaders, one in energy and the other in the environment," Gerard Mestrallet, Suez chief executive officer and future president of the new group told reporters during a conference call in Paris.
For 2007, GDF and Suez posted a strong performance netting profits worth 5.6 billion euros (about 8.7 billion U.S. dollars) out of a turnover of 74.3 billion euros and a net operating profit of 8.3 billion euros, according to official figures.
With the financial debt of the two groups currently estimated at about 15.8 billion euros, both GDF and Suez have confirmed their intention to save up 1 billion euros per year between now and 2013, and also boost investments to an annual average of 10 billion euros per year from 2008 to 2010, according to the joint statement.
The two companies have also reiterated their intention to distribute 50 percent of their net income to shareholders, with a growth dividend per share of between 10 percent and 15 percent per annum on average, according to the same source.
Source: Xinhua
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