GDF Suez

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GDF Suez S.A.
Type Société Anonyme
Traded as Euronext: GSZ
Industry Electric utility
Predecessor(s) Gaz de France
Suez
Founded 22 July 2008
Headquarters 8th arrondissement, Paris, France
Key people Gérard Mestrallet (Chairman and CEO), Jean-François Cirelli (Vice-Chairman and President)
Products Natural gas production, sale and distribution, electricity generation and distribution, hydroelectricity, wind power, energy trading
Revenue €84.48 billion (2010)[1]
Operating income €8.795 billion (2010)[1]
Profit €4.616 billion (2010)[1]
Total assets €184.66 billion (end 2010)[1]
Total equity €70.72 billion (end 2010)[1]
Employees 236,120 (average, 2010)[1]
Website www.gdfsuez.com
File:GDF Suez HQ.jpg
GDF Suez head office

GDF Suez S.A. is a French multinational electric utility company, headquartered in 8th arrondissement, Paris; which operates in the fields of electricity generation and distribution, natural gas and renewable energy.

The company, formed on 22 July 2008 by the merger of Gaz de France and Suez, traces its origins to the Universal Suez Canal Company founded in 1858 to construct the Suez Canal. The firm also holds a 35% stake in Suez Environnement, the water treatment and waste management company spun off from Suez at the time of the merger.[2]

GDF Suez bought 70% of Britain's International Power in August 2010, creating the world's largest independent utility company.[3][4] The purchase of the remaining 30% was announced by GDF Suez in April 2012 and the transaction is expected to close by July 2012[5][6].

As of 2010 GDF Suez employs 236,000 people worldwide, including 1,200 researchers and experts at 9 R&D centers, with revenues of €84.5 billion. GDF Suez is listed on the Euronext exchanges in Paris and Brussels and is a constituent of the CAC 40 and BEL20 indices.

History

Background : Before 2006

See also: Suez (company) and Gaz de France

Prior to the GDF Suez merger plans in 2006, it existed as two separate French multinational corporations - Suez S.A. and Gaz de France, with a rich history tracing two centuries.

Suez was (and still remains, through GDF Suez as) one of the oldest continuously existing multinational corporations in the world as the result of nearly two centuries of reorganisation and corporate mergers. One line of corporate history date back to the 1822 founded Algemeene Nederlandsche Maatschappij ter begunstiging van de volksvlijt (literally: General Dutch Company for the favouring of industry) by King William I of the Netherlands (see Société Générale de Belgique). The origin of its name 'Suez' traces back to its another founding entity – the Compagnie universelle du canal maritime de Suez founded in 1858 to build the Suez Canal. Suez S.A. was result of a 1997 merger between the Compagnie de Suez and Lyonnaise des Eaux.

Gaz de France was created in 1946 along with its sister company Électricité de France (EDF) by the French Government. After the liberalisation of Europe’s energy markets, Gaz de France also entered into the electricity sector, having developed combined natural gas-electricity offerings. The company's capital was partially floated on the Paris Stock Exchange in July 2005, raising €2.5 billion for the French Government.[7]

Evolution of GDF Suez : 2006 - till date

See also: Suez (company) and Gaz de France

On February 25, 2006, French Prime minister Dominique de Villepin announced the merger of water supply and treatment, waste management and energy company Suez and power firm Gaz de France, with the aim of creating the world's largest liquefied natural gas company.[8] Since the French state owned over 80% of Gaz de France, it was necessary to pass a new law in order to make the merger possible. Whilst Nicolas Sarkozy was for several months opposed to the Villepin government’s plans for a merger of the two companies, preferring a three-way deal with Italy's Enel which would maintain a controlling stake for the state,[9] he subsequently accepted the government proposal.[10]

The plan for a merger between Gaz de France and Suez came under fire from the whole of the political left,[11] which feared the loss of one of the last ways of preventing the price rises experienced over the previous three years, and by the social Gaullists and trade unions.[12][13] In August 2006, the left-wing opposition submitted a record-breaking 137,449 amendments to the proposed legislation. Under normal procedure, parliament would have been required to vote on the amendments, which would have taken 10 years.[14] The French Constitution does give the government options to bypass such a filibuster, but in the end these were not used.[15]

Law No. 2006-1537 of December 7, 2006 on the energy sector authorised the privatisation of Gaz de France. On 3 September 2007, Gaz de France and Suez announced agreed terms of merger, on the basis of an exchange of 21 Gaz de France shares for 22 Suez shares via the absorption of Suez by Gaz de France.[16] Various holdings of Gaz de France and Suez had to be divested in order to satisfy the concerns of the European Commissioner for Competition: GDF agreed to sell its approximate 25% stake in Belgian electricity producer SPE for €515 million. The stake was purchased by fellow SPE shareholder Centrica which exercised its right of first refusal,[17] blocking a previous agreement to sell the stake to Électricité de France.[18] Suez, meanwhile, was forced to reduce its shareholding in natural gas distributor Fluxys[19] and sell its Belgian gas supply subsidiary Distrigas to Eni.[20]

The newly created GDF Suez came into existence on 22 July 2008; the world's second-largest utility with over €74 billion in annual revenues.[21] The deal resulted in the conversion of the French state's 80% stake in GDF into just over 35% of shares of the new company. The water and waste assets which formerly formed part of Suez were spun off into a new publicly traded company, Suez Environnement, in which GDF Suez retains a stake.

In July 2009, the European Commission fined GDF Suez and E.ON €553 million both over arrangements on the MEGAL pipeline.[22][23] It was the second biggest fines imposed by the European Commission and first one on the energy sector.[22][24] In 1975, Ruhrgas and Gaz de France concluded a deal according to which they agreed not to sell gas in each other's home market. The deal was abandoned in 2005.[22]

In October 2009 GDF Suez was placed 6th in an A.T. Kearney/BusinessWeek ranking of the "World's Best Companies", the highest-placed European firm.[25]

On 10 August 2010 the company announced a merger of its GDF Suez Energy International business unit, along with its operations within the United Kingdom and Turkey, with International Power. The acquisition created the world’s biggest independent power producer and the enlarged company will retain International Power's listing on the London Stock Exchange and be 70% owned by GDF Suez.[26][3][4]

In December 2010, GDF Suez became the key founding member of the 'Medgrid' company[27] - a consortium of twenty plus utilities, grid operators, equipment makers,financing institutions and investors; which will implement the 'Medgrid project', a French renewable energy initiative within the framework of the Union for the Mediterranean (UfM). The project, planned in North Africa, aims to promote and develop a Euro-Mediterranean electricity network of 20GW installed generating capacity, with 5GW being devoted for exports to Europe. The medgrid together with the German initiated Desertec project[28] would serve as the backbone of the European Supergrid[29][30].

On 16 April 2012, the purchase of the remaining 30% of International Power was announced by GDF Suez, and the transaction is expected to close by July 2012[5]. GDF Suez was advised by Rothschild and Ondra Partners, while Barclays, Morgan Stanley and Nomura advised International Power.[5][6].

Operations

GDF Suez is organized in six business lines: Energy France, comprising a unit that supplies natural gas and electricity to private customers, professionals and businesses throughout France; Energy Europe and International, engaged in the production of electricity and distribution and supplying of gas out through five divisions in Benelux and Germany, the rest of European countries, North and Latin America, Middle East, Asia and Africa; Global Gas and Liquid Natural Gas (LNG), which includes exploration-production, supply, sales and liquid natural gas (LNG) project-related activities; Infrastructures, which operates the transport, supply and storage of natural gas and the regasification of LNG; Energy Services, providing consulting services for the design and construction of electrical, nuclear, gas and industrial facilities; and Environment, specialized in the provision of water, waste treatment and recovery.

Key Figures

  • 218,350 employees in close to 70 countries

- inc. 62,900 in electricity and gas - and 155,450 in services.

  • €84.5 billion in 2010 revenues.
  • €11 billion in investments per year over 2011-2013.
  • 1,100 researchers and experts at 9 R&D centers.
  • 1st company in the “utilities” sector worldwide (Forbes Global 2000).
  • Most valuable brand in the “utilities” sector worldwide (Brand Finance Global 500).[31]
  • 6th company in the world (A.T. Kearney – World’s Best Companies 2009).

Electricity generation

France

Thanks to former Suez subsidiaries such as Compagnie Nationale du Rhône (CNR), Electrabel and Société Hydro Electrique du Midi (SHEM), GDF Suez is the second-largest generator of electricity in France[32] behind EDF.[33] 64% of the group's production comes from renewable sources,[34] principally hydroelectricity (through CNR and SHEM) and wind power, the latter of which both Gaz de France and Suez moved aggressively into in 2007 and 2008. Recently acquired subsidiaries include La Compagnie du Vent (majority stake),[35] the wind farm business of Nass & Wind[36] and Erelia.[37] The company also operates a natural gas-fired combined cycle power plant (DK6) in Dunkirk. With the stated aim of reaching a total production capacity of 10GW by 2013, three gas-fired thermal power plants at Fos-sur-Mer, Montoir-de-Bretagne and Saint-Brieuc are currently in various stages of development, as is a solar panel project in Curbans.[34]

International

The GDF Suez group also generates electricity in a number of countries outside France. Most notably, the company is the leading producer in both Belgium and the Netherlands through Electrabel[38] (and the fifth-largest generator in Europe overall),[39] as well as the largest non-state owned generator in both Brazil[40] and Thailand[41] (thanks to majority stakes in Tractebel Energia and Glow Energy respectively). GDF Suez also holds a 50% stake in NuGeneration (NuGen), a company planning to build a new nuclear power station of up to 3.6GW capacity at Sellafield in the United Kingdom.[42] The other 50% of NuGen is held by Iberdrola. The company also operates in North and Latin America through its Suez Energy International unit, as well as in other European and Asian countries. The company generates electricity through various types of plants, including thermal power, nuclear power, combined heat and power, wind farms, hydroelectric and biomass.[43]

Carbon intensity
Year Production (TWh) Emission (Gt CO2) kg CO2/MWh
2002 115 44.48 387
2003 130 41.59 320
2004 125 40.83 327
2005 123 39.36 319
2006 129 40.4 314
2007 148 50.52 341
2008 145 47.58 327
2009 141 45.44 322
See also: List of European power companies by carbon intensity

Natural gas

Distribution, transportation and storage

French customer offerings

  • Dolcevita: for private consumers
  • Provalys: for small businesses
  • Energies Communes: for governmental consumers (cities, régions)
  • Energy: for large companies and corporations
  • Cegibat: for construction and building companies

Subsidiaries and holdings

Shareholder structure

The largest shareholder in GDF Suez as of 31 December 2009 is the Government of France with 35.9%. Other major stakes are held by Groupe Bruxelles Lambert (5.2%), employees of the company (2.3%), Caisse des Dépôts et Consignations (1.9%), CNP Assurances (1.1%) and Sofina (0.6%). Treasury stock accounted for a further 2% of the company's share capital.[44]

Management

The GDF Suez General Management:

GDF Suez is administered by a Board of Directors of 23 members. The Board is backed by the recommendations of five specialized committees. The Management Committee and the Executive Committee make up the executive bodies of GDF Suez.


The GDF Suez Management Committee:

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 "Annual Report 2010" (PDF). GDF Suez. http://www.gdfsuez.com/document/?f=files/en/ddrfinalvus.pdf. Retrieved 1 April 2011.
  2. ↑ Maitre, Marie (22 July 2008). "Suez Environnement gushes on Paris market debut". Reuters. http://uk.reuters.com/article/hotStocksNews/idUKL2212286520080722. Retrieved 2008-07-22.
  3. ↑ 3.0 3.1 "GDF takes control of International Power to form energy giant". Reuters. 10 August 2010. http://uk.reuters.com/article/2010/08/10/uk-gdfsuez-intlpower-idUKTRE6790KW20100810. Retrieved 2012-06-06.
  4. ↑ 4.0 4.1 "GDF Suez Is Stepping On The Gas In Fast Growing Markets". http://seekingalpha.com/article/540931-gdf-suez-is-stepping-on-the-gas-in-fast-growing-markets. Retrieved 2012-06-06.
  5. ↑ 5.0 5.1 5.2 "GDF Suez to Buy Remaining Stake in British Utility for $10 Billion". http://dealbook.nytimes.com/2012/04/16/gdf-suez-to-buy-remaining-stake-in-british-utility-for-10-billion/. Retrieved 2012-06-06.
  6. ↑ 6.0 6.1 Independent advisers win out on GDF Suez deal
  7. ↑ Moya, Elena (8 July 2008). "Gaz de France Shares Jump After Public Offering". Bloomberg. http://www.bloomberg.com/apps/news?pid=10000085&sid=agF4FhEQmRPA&refer=europe. Retrieved 2008-07-12.
  8. ↑ "Dominique de Villepin a annoncé un projet de fusion entre Gaz de France et Suez" (in French). Le Monde. 25 February 2006. http://www.lemonde.fr/cgi-bin/ACHATS/acheter.cgi?offre=ARCHIVES&type_item=ART_ARCH_30J&objet_id=935728&clef=ARC-TRK-D_01. Retrieved 2008-07-12.
  9. ↑ Gow, David (15 June 2006). "EU to investigate Suez-Gaz de France deal". The Guardian (London). http://www.guardian.co.uk/business/2006/jun/15/europeanunion.france. Retrieved 2008-07-22.
  10. ↑ "Nicolas Sarkozy réaffirme son "accord" au projet de fusion GDF-Suez" (in French). Associated Press (Le Nouvel Observateur). 15 August 2006. http://archquo.nouvelobs.com/cgi/articles?ad=politique/20060815.FAP5893.html&host=http://permanent.nouvelobs.com/. Retrieved 2008-07-22.
  11. ↑ Maitre, Marie (2 September 2007). "France launches new GDF-Suez utility merger plan". Reuters. http://www.reuters.com/article/companyNewsAndPR/idUSL0213106220070902. Retrieved 2008-07-22.
  12. ↑ "French court puts brakes on merger of Gaz de France and Suez". Bloomberg, Associated Press (International Herald Tribune). 22 January 2008. http://www.iht.com/articles/2008/01/22/business/merge.php. Retrieved 2008-07-22.
  13. ↑ Hotten, Russell (4 September 2007). "Suez and Gaz de France in £47bn merger". The Daily Telegraph (London). http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/03/bcngaz103.xml. Retrieved 2008-07-22.
  14. ↑ "TIMELINE: Key dates in Gaz de France-Suez merger". Reuters. 2 September 2007. http://www.reuters.com/article/idUSL0257250120070902. Retrieved 2010-02-24.
  15. ↑ Kanter, James (19 September 2006). "Plan for Gaz de France advances toward a vote". International Herald Tribune. http://www.nytimes.com/2006/09/19/business/worldbusiness/19iht-gdf.2868154.html. Retrieved 2010-02-24.
  16. ↑ "Suez, Gaz De France Agree To New Merger Deal". RTT News. 2007-09-04. http://www.rttnews.com/sp/todaystop.asp?item=3. Retrieved 2007-09-04.
  17. ↑ Shelley, Toby (23 July 2008). "Centrica takes control of Belgium’s SPE". Financial Times. http://www.ft.com/cms/s/0/c03309ca-5883-11dd-a093-000077b07658.html. Retrieved 2008-07-23.
  18. ↑ Maitre, Marie (20 June 2008). "GDF agrees to sell SPE stake to EDF for $800 mln". Reuters. http://uk.reuters.com/article/mergersNews/idUKL2025360720080620. Retrieved 2008-07-22.
  19. ↑ "Suez sells 12.5 pct stake in Fluxys to UK fund Ecofin Ltd for 228 mln euros". AFX News (Forbes). 4 July 2008. http://www.forbes.com/afxnewslimited/feeds/afx/2008/07/04/afx5183695.html. Retrieved 2008-07-22.
  20. ↑ "Key moments in GDF Suez combination". Associated Press. 16 July 2008. http://www.boston.com/news/world/europe/articles/2008/07/16/key_moments_in_gdf_suez_combination/. Retrieved 10 October 2010.[dead link]
  21. ↑ Vidalon, Dominique (1 July 2008). "Suez shares to exit French CAC-40 July 22". Reuters. http://uk.reuters.com/article/oilRpt/idUKL0113342620080701. Retrieved 2008-07-12.
  22. ↑ 22.0 22.1 22.2 Nikki Tait (2009-07-08). "Brussels fines GDF and Eon €1.1bn". Financial Times. http://www.ft.com/cms/s/0/3bc0a53c-6b9f-11de-9320-00144feabdc0.html. Retrieved 2009-07-08.
  23. ↑ Charles Forelle (9 July 2009). "EU Slaps $1.53 Billion Fine on Natural-Gas Cartel". The Wall Street Journal. http://online.wsj.com/article/SB124704364603110663.html. Retrieved 10 October 2010.
  24. ↑ Ian Traynor (2009-07-08). "Brussels levies €1.1bn fine on gas pact pair". London: The Guardian. http://www.guardian.co.uk/business/2009/jul/08/gas-company-fines-european-commission. Retrieved 2009-07-08.
  25. ↑ Deprez, Esmé (1 October 2009). "World's Best Companies 2009". BusinessWeek. http://www.businessweek.com/globalbiz/content/sep2009/gb20090930_066258.htm. Retrieved 2009-10-18.
  26. ↑ Lundgren, Kari (10 August 2010). "GDF Buys International Power, Pays Special Dividend". Bloomberg. http://www.bloomberg.com/news/2010-08-10/gdf-set-to-pay-92-pence-a-share-dividend-to-control-international-power.html. Retrieved 10 August 2010.
  27. ↑ "Secretary General Ahmad Masa’deh expects the MEDGRID project to positively impact climate change". ufmsecretariat.org. http://www.ufmsecretariat.org/en/secretary-general-ahmad-masa%E2%80%99deh-speaks-at-medgrid-project-signature/. Retrieved 27 Nov 2011.
  28. ↑ "Huge medgrid joins giant solar desertec plan". greenprophet.com. http://www.greenprophet.com/2011/11/huge-medgrid-joins-giant-solar-desertec-plan/. Retrieved 27 Nov 2011.
  29. ↑ "Desertec and Medgrid: Competitive or compatible?". social.csptoday.com. http://social.csptoday.com/emerging-markets/desertec-and-medgrid-competitive-or-compatible. Retrieved 27 Nov 2011.
  30. ↑ "Survey paper 2: A European Supergrid: Present State and Future Challenges Authors: S. Cole, K. Karoui, T.K. Vrana, O.B. Fosso, J.B. Curis, A.M. Denis, C.C. Liu". pscc-central.org. http://www.pscc-central.org/uploads/tx_ethpublications/sp2.pdf. Retrieved 27 Nov 2011.
  31. ↑ http://brandirectory.com/league_tables/table/global_500_2011
  32. ↑ "GDF Suez shares fall in stock market debut as merger hype wanes". Associated Press (International Herald Tribune). July 22, 2008. http://www.iht.com/articles/ap/2008/07/22/business/EU-France-GDF-Suez.php. Retrieved 2008-07-27.
  33. ↑ "EdF is by far the largest electricity generator in France.." "Commission opens in-depth investigation into the joint control of EnBW by EDF and OEW" (Press release). European Commission. 3 October 2000. http://europa.eu/rapid/pressReleasesAction.do?reference=IP/00/1099. Retrieved 2008-07-27.
  34. ↑ 34.0 34.1 "Energy France". GDF Suez. http://www.gdfsuez.com/en/group/operational-organization/energy-france/energy-france/. Retrieved 10 October 2010.
  35. ↑ "Suez buys 50.1 pct of Cie du Vent for 321 mln eur; to raise stake to 56.8". AFX News (Forbes). 16 November 2007. http://www.forbes.com/afxnewslimited/feeds/afx/2007/11/16/afx4347715.html. Retrieved 2008-07-27.
  36. ↑ "GDF buys Nass and Wind unit; to create renewable energy division". AFX News (Forbes). 6 March 2008. http://www.forbes.com/markets/feeds/afx/2008/03/06/afx4738674.html. Retrieved 2008-07-27.[dead link]
  37. ↑ "Gaz de France buys 95 percent of French wind power company Erelia". Associated Press (International Herald Tribune). 9 October 2007. http://www.iht.com/articles/ap/2007/10/09/business/EU-FIN-France-GDF-Wind-Power.php. Retrieved 2008-07-27.
  38. ↑ "France proposes 'patriotic' merger for utilities". International Herald Tribune. 26 February 2006. http://www.iht.com/articles/2006/02/26/business/suez.php?page=1. Retrieved 2008-07-27.
  39. ↑ Mitchell, Adam (16 July 2008). "Suez CEO: GDF-Suez "Clearly" In Private Sector". Dow Jones Newswires (EasyBourse). http://www.easybourse.com/bourse-actualite/suez/update-suez-ceo-gdf-suez-clearly-in-private-sector-FR0000120529-488501. Retrieved 2008-07-27.
  40. ↑ Ragir, Alexander; Freebairn, William (20 May 2008). "America Movil, Aracruz, OHL Brasil, Vale: Latin Equity Preview". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601084&sid=anhV4RroxMRo&refer=stocks. Retrieved 2008-07-27.
  41. ↑ Hampton, Stuart. "Glow Energy Public Company Limited". Hoover's. http://www.hoovers.com/glow-energy/--ID__139529--/freeuk-co-factsheet.xhtml. Retrieved 2008-07-27.
  42. ↑ "About Nugen". NuGeneration. http://www.nugeneration.com/about_nugen.html.
  43. ↑ "Electricity production". GDF Suez. http://www.gdfsuez.com/en/activities/our-businesses/electricity-production/electricity-production/. Retrieved 10 October 2010.
  44. ↑ "Shareholder structure". GDF Suez. 31 December 2009. http://www.gdfsuez.com/en/finance/share-price/shareholder-structure/shareholder-structure/. Retrieved 10 October 2010.
  45. ↑ GDF Suez Governance

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