Suez/GDF merger under scrutiny of Suez European Works Council, 14 March 2006, Paris

(Brussels 15 March 2006) The Bureau of the SUEZ European Consultative Committee (European Works Council) met on 14 March to discuss the planned 70 billion Euro merger between Suez and Gaz de France.

Amid the current political crisis of the European energy sector, the trade union delegates discussed with their experts from Secafi-Alpha the possible implications of the proposed merger for employment, prices, supply and nuclear security of power plants, and the effects on other energy companies, particularly French electricity company EDF. Clearly the merger will lead to job duplications in headquarters, IT and administrative services, call centres, and have an impact on GDF/EDF joint public distribution centres employing 60.000 people. Dismantling of some of the activities is likely to take place while there is no guarantee the merger will prevent future risks of hostile takeovers.

In the meeting management described the merger as a very ambitious industrial project and the result of a long process supported by this year's top financial record results following the takeover by the company of Belgian electricity Electrabel. The threat of a hostile takeover by Enel accelerated, but did not spark off, the merging process. It added the following:

- Willingness to engage in a dialogue with trade unions, at both company and confederal levels
- Both companies will be treated on equal footing
- The environment branch (including water) will remain in the group;
- Number of branches will rise from 4 to 7 (including a specific gas one);
- The group's geographical logic will need to be better aligned with the sectors'

It was not possible at this stage to provide a calendar for the above changes.

The Bureau requested more information on employment, social and financial implications. “We are far too much in the dark on a number of issues to be able to judge the value of the merger for workers, consumers and overall energy sector in Europe. The ability of public authorities to control and regulate the energy sector is another central aspect that needs be taken into account” said EPSU Deputy General Secretary Jan Willem Goudriaan. The EWC will be working against a tight schedule:

-* Extraordinary meeting of the EWC and French Group Committee scheduled for 7 April in Paris, with the participation of Mr Mestrallet, Suez big boss.
-* Suez Communication on financial and industrial aspects of the merger is due for end of March or early April
-* French government's reply to Italian Government's challenge of the merger is expected to be submitted to the Commission on 17 March
-* Once the proposed merger has been published in the EU official journal, possibly in April, the Commission (Competition DG) has 30 days to examine the request and consult stakeholders including trade unions. Following this delay the Commission either gives its green light or makes further detailed investigation including conditions requests to accept the merger (within a 3 month period).
The prospective setting up of a European Company Statute will be delayed due to the merger talks.

For further information please contact Jan Willem Goudriaan
epsu@epsu.org or + 32 2 2501080

Apart from the information provided by the companies which you can find on their websites the following are possibly of interest:

- Recently the Belgian Energy Regulator published its evaluation of the planned merger:

-* www.creg.be/pdf/Studies/F534NL.pdf (Dutch)
-* www.creg.be/pdf/Etudes/FR34FR.pdf (French)

- Reaction of the Belgian FGTB, trade union confederation:

-* FR: www.fgtb.be

-* NL: www.fgtb.be

French confederations:
- Reaction of CFDT:
www.cfdt.fr

- Reaction of CGT
www.cgt.fr
including a call to block the merger and organize European wide action

- Reaction of FO
www.force-ouvriere.fr
go to the section on Fédération Nationale de l'Energie et des Mines on the right hand.

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