Suez-GDF merger stalled by unions

The merger of French utility firm Suez and state-run Gaz de France has been postponed following a legal ruling.

A union plea for the deal to be delayed until it had been studied further was upheld by a Paris court on Tuesday.

The court also upheld a former ruling that the merger should be stopped until GDF's European works council had expressed its views on the deal.

Union members and France's main opposition party say the merger will push energy prices up and cost jobs.

'Shortest timeframe'

The two firms said they would continue to work on the deal, which requires the French government to reduce its share in GDF significantly, from some 70% to about a third.

"The merger project between the Gaz de France and Suez remains the most pertinent for the future of our companies," the companies said.

"We plan to implement it in the shortest possible timeframe whilst respecting all stakeholders' interests."

A merger, which recently gained conditional approval from the EU, would create a company with a market capitalisation of about 80bn euros ($102bn; £54bn).

French Budget Minister Jean-Francois Cope told French television that the court's decision would postpone the deal by "some weeks, or months but not more".

Since first being suggested, the merger plan has caused controversy.

Some analysts viewed the merger move by France as a defensive way to prevent Italy's utility firm Enel from acquiring Suez.

While France's main opposition party has fiercely opposed the merger, the government has argued that France needs a national energy firm to strengthen its position in negotiating deals internationally.

However, disagreement has also been evident between the two firms over the details of the deal, with Suez wanting better terms.

Source: BBC News