GDF Suez SA (GSZ), the French utility that agreed to take over International Power Plc (IPR) today, said it has no intention of extending its acquisition plans to water company Suez Environnement.
GDF Suez, which already holds 34 percent of Paris-based Suez Environnement, isn’t legally bound to bid for the remaining shares unless it raises its stake by more than 2 percent, Chief Executive Officer Gerard Mestrallet said today in a presentation to analysts. “This is not at all our intention,” he said.
GDF Suez, Europe’s biggest utility by market value, agreed to buy the 30 percent of London-based International Power it doesn’t own for 8.4 billion euros ($11 billion) to expand in Asia and Latin America. The transaction, giving GDF Suez full control over the company it merged some divisions with in 2011, would be the second-biggest deal this year after Glencore International Plc’s offer for Xstrata Plc.
GDF Suez’s stake in Suez Environnement (SEV), whose largest competitor in Europe is Veolia Environnement SA, stems from a 2008 merger between nuclear utility Suez SA and state-controlled Gaz de France SA to create GDF Suez. During Mestrallet’s battle to push through that deal, he fought to keep a controlling stake in Suez Environnement backed by a five-year shareholder accord.
“Suez Environnement has a special status in the group,” Mestrallet said today. “This is a satisfying and comfortable situation.”
A group of investors controlling about 12 percent of Suez Environnement have first refusal on holdings offered for sale. The group includes Areva SA, Caisse des Depots et Consignations, Belgian billionaire Albert Frere’s Groupe Bruxelles Lambert SA and Group CNP Assurances.
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