French Fin Min: Utility Chief Gadonneix Will Step Down

The chief executive of French utility giant Electricite de France (EDF.FR) won't be reappointed to his position as his term has come to an end and it is best for all that he give up leadership of the state-controlled company, Finance Minister Christine Lagarde said Sunday.

"Sometimes it is necessary to pass on the baton," Lagarde said in a television interview.

The departure of EdF CEO Pierre Gadonneix has been speculated for some time, especially after he drew the ire of public officials by calling for substantive household tariff increases a few months ago. Government officials swiftly rejected his call. The remarks appear to have sealed the executive's fate. In her hour-long interview Sunday, Lagarde declined to be drawn into a discussion over Gadonneix's successor, widely speculated in the French press to be Henri Proglio, CEO of the big French environmental services group Veolia SA (VIE.FR).

Earlier in the day, French Prime Minister Francois Fillion was quoted in a newspaper interview as also confirming Gadonneix's departure, also not mentioning a likely successor.

EdF's supervisory board is meeting Sunday night to select new directors and Gadonneix isn't expected to be one of them. There still is some speculation that Proglio or another successor could be appointed before the evening is over. The Veolia official is already a member of the EdF's board.

When asked if there is a possibility that EdF could be merge with Veolia, Largarde only would note that the electric and gas company's mission is to become a major player in the global nuclear power market and to grow worldwide.

EdF already is one of the world's largest operators of nuclear power plants, running 58 reactors in France, where 80% of electric power produced is via nuclear plants. Once that is achieved, one can look at how to grow the company, she added.

-By A.H. Mooradian, Dow Jones Newswires, [phone]; [e-mail].