Berlusconi protest over French energy merger

Italy’s Premier Silvio Berlusconi said today that the European Union should intervene in the planned French energy merger aimed at blocking a potential hostile bid from Italian energy company Enel.

Italy’s Premier Silvio Berlusconi said today that the European Union should intervene in the planned French energy merger aimed at blocking a potential hostile bid from Italian energy company Enel.

Berlusconi’s comments followed similar ones earlier in the day by Foreign Minister Gianfranco Fini, who said that the Italian government will point out in Brussels that “respect of the rules is indispensable”.

The premier’s remarks came in response to a question about whether the EU should intervene in the French merger.

Berlusconi also said Italy’s finance minister, Giulio Tremonti, and industry minister, Claudio Scajola, “are taking all the necessary steps” to react to the French move, but did not immediately elaborate, the agencies said.

Italian news agencies reported this afternoon that Tremonti was scheduled to travel to Brussels tomorrow to meet EU Competition Commissioner Neelie Kroes and then, on Wednesday, EU Internal Market Commissioner Charlie McCreevy.

The Finance Ministry could not immediately confirm the trip.

Earlier, Gaz de France and Suez had announced details of their hastily-arranged all-French merger, designed to create a new leading player in energy and environmental services – and fend off a bid for Suez by Italian power company Enel.

With a combined market capitalisation of about €72bn, the new entity would be one of the world’s largest utilities companies.

The government-backed deal, which entails the privatisation of state-controlled GDF, also answers growing French concerns about security of energy supplies, both companies said.

Under terms hammered out in a heavy working weekend for the bankers, Suez will pay out a special dividend to existing shareholders, worth €1.25bn in total, before offering to swap one new Suez share for each GDF stock.

The plan was first announced by French Prime Minister Dominique de Villepin on Saturday, three days after Italy’s largest power company, Enel, confirmed its interest in Electrabel, Suez’s Belgian power unit.

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