GDF Suez

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GDF Suez S.A. is a French multinational energy company which operates in the fields of electricity generation and distribution, natural gas and renewable energy. The world's largest utility after taking control of Britain's International Power, the company was initially formed by the merger of Gaz de France and Suez on 22 July 2008. 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]

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.

Contents [hide]

1 History

2 Operations

2.1 Key Figures

2.2 Electricity generation

2.2.1 France

2.2.2 International

2.2.2.1 Carbon intensity

2.3 Natural gas

2.4 Distribution, transportation and storage

2.4.1 French customer offerings

2.5 Subsidiaries and holdings

3 Shareholder structure

4 Management

5 References

6 External links

[edit]History

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.[3] 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,[4] he subsequently accepted the government proposal.[5]

The plan for a merger between Gaz de France and Suez came under fire from the whole of the political left,[6] 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.[7][8] 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.[9] The French Constitution does give the government options to bypass such a filibuster, but in the end these were not used.[10]

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.[11] 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,[12] blocking a previous agreement to sell the stake to Électricité de France.[13] Suez, meanwhile, was forced to reduce its shareholding in natural gas distributor Fluxys[14] and sell its Belgian gas supply subsidiary Distrigas to Eni.[15]

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.[16] 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.[17][18] It was the second biggest fines imposed by the European Commission and first one on the energy sector.[17][19] 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.[17]

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.[20]

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 enlarged company will retain International Power's listing on the London Stock Exchange and be 70% owned by GDF Suez.[21]

[edit]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.

[edit]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)[22].

6th company in the world (A.T. Kearney – World’s Best Companies 2009).

[edit]Electricity generation

[edit]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[23] behind EDF.[24] 64% of the group's production comes from renewable sources,[25] 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),[26] the wind farm business of Nass & Wind[27] and Erelia.[28] 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.[25]

[edit]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[29] (and the fifth-largest generator in Europe overall),[30] as well as the largest non-state owned generator in both Brazil[31] and Thailand[32] (thanks to majority stakes in Tractebel Energia and Glow Energy respectively). 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.[33]

[edit]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

[edit]Natural gas

[edit]Distribution, transportation and storage

[edit]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

[edit]Subsidiaries and holdings

Gaselys — Energy Trading (100% stake)

Electrabel — electricity in Europe (largest provider in Belgium)

Cofely Ltd. — Building services / facilities management

Fluxys — high pressure gas grid operator in Belgium (45% stake)

GRTgaz — gas transmission network operator in France

Tractebel Energia — Brazilian electricity generator (67.8% stake)

Tractebel Engineering — International engineering consultancy

Suez Environnement — former water and waste assets of Suez (35% stake)

[edit]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.[34]

[edit]Management

Gérard Mestrallet, Chairman & Chief Executive Officer

Jean-François Cirelli, Vice-Chairman and President.

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:

Gérard Mestrallet, Chairman and Chief Executive Officer

Jean-François Cirelli, Executive Vice-President & Chief Operating Officer

Dirk Beeuwsaert, Executive Vice President, in charge of the Energy Europe & International business line

Jean-Marie Dauger, Executive Vice President, in charge of the Global Gas & LNG Division

Gérard Lamarche, Executive Vice President, in charge of Finance.[35]