Series Title | European Voice |
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Series Details | 10/04/97, Volume 3, Number 14 |
Publication Date | 10/04/1997 |
Content Type | News |
Date: 10/04/1997 COMPETITION officials are seeking information about the deal being put together between the Belgian authorities and two French companies to safeguard the independence of utilities operator Tractebel. The government of Belgian Premier Jean-Luc Dehaene is negotiating to ensure that Tractebel, which provides 95&percent; of the country's electricity and all of its gas through its Distrigas subsidiary, remains Belgian when its majority shareholder Compagnie de Suez merges with utilities firm Lyonnaise des Eaux. Officials at the European Commission's Directorate-General for competition (DGIV) will be looking for signs that Tractebel and Lyonnaise will pool or merge their utilities activities, or safeguard agreements which carve up the Belgian market for public contracts. At the root of the problem is a complex web of industrial interests held by Suez and its 63&percent;-owned sister group Société Générale de Belgique (SGB) - the Belgian holding company with a finger in virtually every corporate pie in the country. Last autumn, SGB took control of Tractebel by increasing its stake from 40&percent; to 61&percent;. Once Suez has merged with Lyonnaise, Dehaene and his ministers fear that the Belgian character of not only Tractebel but also SGB will be undermined. As the talks have gone on, the government has reminded Suez and Lyonnaise that, along with regional and municipal authorities, it has the power to fix electricity prices charged to consumers by Tractebel's supplier subsidiary Electrabel. Given that both Tractebel and Lyonnaise operate in the development of European-wide markets for energy and water, the Commission will be keen to avoid foreclosure. For example, the two companies could bid together for the kind of multi-utility contracts which are becoming more common. Market analysts suspect that after the merger, Lyonnaise could well end up combining with Tractebel while Suez may sell off its remaining non-utilities businesses, which could concentrate operations even further. Générale des Eaux - the leading rival French utilities group to Lyonnaise which also owns a stake in Suez through its shareholding in Belgian firm Electrafina - opposes the merger and is likely to make its views plain to the Commission. Last week, the Suez board gave the merger its go-ahead and paid a special dividend totalling 460 million ecu as compensation to shareholders for the historic under-performance of the stock. The firms have promised to continue talks tomorrow (11 April) and an announcement will be made in the coming weeks. |
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Subject Categories | Energy, Internal Markets |