THE French Government’s policy of economic patriotism suffered a setback last night when its own MPs opposed the planned merger between Gaz de France and the utility Suez.
Their revolt was a humiliation for Dominique de Villepin, the Prime Minister, who had announced the €72 billion (£49.3 billion) tie-up as a way of blocking a takeover of Suez by the Italian energy group, Enel.
It appears to signal the end of the plan for a full merger, although the Government may try to salvage something by encouraging cross-shareholdings between the GdF and Suez.
Bernard Accoyer, the head of the ruling centre-right Union for a Popular Movement parliamentary group, accepted a majority of MPs were against the move because it would entail the privatisation of GdF.
The climbdown opens a path for Enel to further its attempt to take control of Suez’s prized Belgian subsidiary, Electrabel. After considering a hostile approach, the Italian group is now seeking to negotiate with Suez over the Belgian supplier.
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Enel’s change of attitude helped to swing opinion against M de Villepin, who had touted the merger between Suez and Gaz de France as a barrier against a hostile foreign raid on one of France’s biggest groups.