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[waldron] 25/4/2012 15:43

GDF Suez Mulls Exporting Gas To Argentina From Chile -Report
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Gdf Suez (EU:GSZ)
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Today : Wednesday 25 April 2012
French-Belgian energy company GDF Suez SA (GSZ.FR) is considering the export of natural gas from Chile to Argentina, Pulso newspaper reported Wednesday quoting a company executive.
In northern Chile, Suez holds a controlling stake in the Mejillones liquified natural-gas regasification terminal.
The infrastructure to send gas to Argentina is already in place as that country used to export gas to Chile but cut its exports in the mid 2000s to meet internal demand.
"We've evaluated it and we're working on it but we haven't been able to settle it yet," Pulso quoted Jan Flachet, Suez' general manager for Latin America, as saying.
In addition to the Mejillones LNG terminal and regasification plant, in Chile Suez controls power generator E-CL SA (ECL.SN) which mostly supplies the northern SING grid.
Suez officials couldn't immediately be reached for comment but E-CL general manager Lodevijk Verdeyen made similar remarks regarding gas sales to Argentina last year.
-By Carolina Pica, Dow Jones Newswires; 56-2-715-8919; [e-mail]

[waldron] 25/4/2012 09:09

D'après le consensus de marché calculé à la date du 18/04/2012, les analystes conseillent d'acheter le titre GDF SUEZ. En effet, sur un total de 15 bureaux d'études ayant fourni des estimations, 9 sont à l'achat, 3 sont à la vente et 3 sont neutres. L'indice de recommandation AOF, reflétant l'avis moyen des analystes et s'étendant de -100% à +100%, est de 40%. Enfin, l'objectif de cours moyen est de 24,22 EUR. Le consensus précédent conseillait d'acheter la valeur .

[waldron] 24/4/2012 22:12

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April 24, 2012 8:09 pm

Asia boosts GDF Suez
By Guy Chazan
GDF Suez, the French utility, posted a 5.7 per cent increase in first-quarter earnings, partly driven by strong sales of liquefied natural gas to Asia and a cold snap in Europe.

GDF, 35 per cent owned by the French government and the world's largest power utility on all measures, said earnings before interest, tax, depreciation and amortisation rose to €5.8bn, while revenue increased 10.5 per cent to €28.2bn.

The company said it expected to acquire UK energy group International Power fully by the middle of the year. This month, it agreed to pay £6.4bn for the 30 per cent it did not already own in the group.

GDF said it had seen "very strong growth" in its global gas and LNG business. Sales of liquefied natural gas more than doubled year on year, rising from seven terawatt hours to 16TWh, with most of the cargoes going to Asia. Its own production of natural gas also increased

[waldron] 23/4/2012 14:56

GDF Suez Confirms 2012 Growth Target After Higher 1Q Ebitda
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Today : Monday 23 April 2012
GDF Suez SA (GSZ.FR) Monday confirmed growth in 2012 should be higher than first anticipated following the second leg of its gradual takeover of U.K. power distributor International Power PLC (IPR.LN), and said its headline first-quarter earnings rose 5.7% from a year earlier thanks to higher revenues from all its businesses.
The French power group said earnings before interest, taxation, depreciation and amortization, or Ebitda, in the first quarter grew to EUR5.82 billion from EUR5.51 billion a year earlier. Analysts polled by Dow Jones Newswires expected EUR5.77 billion. Revenue over the period grew 11% to EUR28.16 billion from EUR25.48 billion a year earlier; analysts had seen EUR27.43 billion.
For 2012, GDF Suez said it expects its net recurring profit, excluding minorities, for 2012 to be in the range EUR3.7 billion-EUR4.2 billion, up from an initial objective of EUR3.5 billion-EUR4 billion, thanks to the International Power transaction.
Earlier this month a deal was sealed under which GDF Suez would pay 418 pence for each International Power share it doesn't already own, well above the 390 pence it initially indicated it would be willing to pay. This put an end to a three-week standoff and sealed the second biggest M&A transaction of the year.
At 1221 GMT, shares in GDF Suez were trading -2.6% lower to EUR18.20 while the CAC-40 benchmark index was down 2.3%.
-By Geraldine Amiel and Inti Landauro, Dow Jones Newswires; [phone]; [e-mail], [e-mail];
Order free Annual Report for International Power Plc
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[waldron] 23/4/2012 08:52

International Power Expands Tihama Power Sites In Saudi Arabia
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Intl Power (LSE:IPR)
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Today : Monday 23 April 2012
Electricity generator International Power PLC (IPR.LN) said Monday that it will expand its Tihama power sites in Saudi Arabia following an award from Saudi Aramco, adding that long-term Energy Conversion Agreements through to 2026 have been signed for the expansion.
MAIN FACTS:
-The expansion will take place at three of the four existing sites and will generate additional capacity of 532MW, or megawatts, and 2,210GJ/h, or gigajoules per hour, of steam.
-Following the expansion, Tihama will have a total capacity of 1,595MW and 8,112GJ/h of steam.
-The ownership structure of the expansion is the same as the existing Tihama project, which is 60% owned by International Power and 40% by Saudi Oger.
-The total project cost for the expansion is estimated to be approximately $430 million which is being funded by a mix of debt and equity in an 80:20 ratio.
-Full financial close of the project is anticipated shortly; the expansion program is expected to complete by 2015.
-Shares closed Friday at 417.3 pence valuing the company at GBP21.26 billion.
-By Rory Gallivan, Dow Jones Newswires; 44-20-7842-9411; [e-mail]

[ariane] 20/4/2012 18:59

GDF Suez SA (GSZ.FR), April 23, at 1200 GMT
MARKET EXPECTATIONS:
First quarter earnings before interest tax, depreciation and amortization, or Ebitda, is seen slightly higher than a year earlier when it stood at EUR5.5 billion. The group's first-quarter performance this year benefited from colder weather conditions than a year earlier which was warmer than normal, while the group recorded a loss of revenue from a tariff deficit last year which won't be the case this time. These two elements should help the group offset a loss of Ebitda from disposals and an expected drop in contribution from Suez Environment SA (SEV.FR) and the activities in Belgium.
MAIN FOCUS:
Investors will be seeking detail about the recommended bid for International Power PLC (IPR.LN) minorities and the disposals announced to partly finance that transaction. As mature-market assets are clearly targeted, investors will want to know if regulated businesses could be divested. Any outlook on the market and the economic and political environment is always welcome, notably as the May 6 French presidential election could change the country's energy priorities. In addition, the Belgian government is still expected to decide on whether it will keep nuclear as part of its energy mix.

[ariane] 20/4/2012 18:45

EARNINGS PREVIEW:European Utilities Continue To Face Tough Markets
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Gdf Suez (EU:GSZ)
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Today : Friday 20 April 2012
TAKING THE PULSE: European utilities continue to face tough market conditions, with a weak European economy still depressing demand and prices. Some, however, have seen support from cold weather in February and an additional day due to the leap year.
In Italy and Spain, the pressure from weak economies on utilities' earnings is expected to have left its mark, with changes in tariffs for regulated assets further increasing margin pressure.
German utilities are expected to post lower profits than a year earlier due mostly to persistent losses in their gas wholesale businesses, where high procurement prices exceed low selling prices. In addition, Germany's accelerated exit from nuclear power is likely to have hit earnings in the first quarter as the shift in policy didn't occur until the second quarter of last year.
The debt-reduction disposal programs that many European utilities are still carrying out will also remain in focus.
Investors will also be keen to hear about utilities' views on current trading conditions as the fragile economy is weighing on energy demand and prices.
COMPANIES TO WATCH:
GDF Suez SA (GSZ.FR), April 23, at 1200 GMT
MARKET EXPECTATIONS:
First quarter earnings before interest tax, depreciation and amortization, or Ebitda, is seen slightly higher than a year earlier when it stood at EUR5.5 billion. The group's first-quarter performance this year benefited from colder weather conditions than a year earlier which was warmer than normal, while the group recorded a loss of revenue from a tariff deficit last year which won't be the case this time. These two elements should help the group offset a loss of Ebitda from disposals and an expected drop in contribution from Suez Environment SA (SEV.FR) and the activities in Belgium.
MAIN FOCUS:
Investors will be seeking detail about the recommended bid for International Power PLC (IPR.LN) minorities and the disposals announced to partly finance that transaction. As mature-market assets are clearly targeted, investors will want to know if regulated businesses could be divested. Any outlook on the market and the economic and political environment is always welcome, notably as the May 6 French presidential election could change the country's energy priorities. In addition, the Belgian government is still expected to decide on whether it will keep nuclear as part of its energy mix.
E.ON AG (EOAN.XE), May 9, likely at 0600 GMT
MARKET EXPECTATIONS: Germany's largest utility by market value is expected to post slightly lower first-quarter profits compared with the same period last year. Analysts point to persistent losses in the natural-gas wholesale business, which is suffering from the spread of high procurement prices and low selling prices. Additionally, Germany's nuclear exit last year only started to really hit the company in the second quarter of 2011. Some of E.ON's nuclear reactors have been shut down permanently, in response to the nuclear disaster in Japan in last March, and that will hit the company's first-quarter earnings.
MAIN FOCUS: Investors will be seeking an update on talks with Russian natural gas monopoly Gazprom OAO (GAZP.RS) over adjusting commercial terms of long-term gas supply contracts that are burdening E.ON's wholesale gas business. Comments on pending disposals--including that of its waste incineration business and the gas transmission unit Open Grid Europe--would also be welcome. E.ON may also provide more details on its ongoing restructuring and cost cutting program, which includes up to 11,000 job cuts globally.
Iberdrola SA (IBE.MC), May 10, before 0800 GMT
MARKET EXPECTATIONS: Iberdrola's first-quarter net profit is likely to be driven by higher power prices in Spain and growth in Latin America, even as cuts in various government-determined remuneration schemes in Spain weigh on results.
MAIN FOCUS: Iberdrola is expected to discuss the effect of the Spanish government's decision to curtail payments for distribution and other regulated activities in efforts to reduce the difference between the costs of generating electricity and the amount consumers pay. Signs of better relations with top shareholder Actividades de Construccion y Servicios SA (ACS.MC) could be share-price positive, as the construction company recently sold 3.7% of its Iberdrola stake to cut down on debt. ACS has been pushing for more influence in Iberdrola's board.
Enel SpA (ENEL.MI), May 10, timing unknown
MARKET EXPECTATIONS:
First-quarter earnings before interest, tax, depreciation and amortization are expected to nudge up slightly from the year before as margins remained strong thanks to the company's policy of locking in sales two years in advance. This has been particularly useful for Enel as electricity demand has dropped amid the sharp slowdown in the Italian economy. Net profit is expected to drop as a new tax hitting the energy sector sinks in.
WHAT TO EXPECT:
Investors will be on the lookout for how Enel's advance sales are going and at what prices the company has been selling compared with the last couple of years as the Italian and Spanish economies--the two biggest for the utility--take the plunge. Observers will also be on the lookout for any comments on Enel's Argentine activities after the government there last week announced a plan to seize a majority stake oil company YPF SA (YPF), a unit of Spain's Repsol YPF SA (REP.MC).
-By Jan Hromadko, Dow Jones Newswires; [phone]; [e-mail]
(Geraldine Amiel in Paris, Ilan Brat in Madrid and Liam Moloney in Rome contributed to this article.)

[ariane] 20/4/2012 10:22

GDF Suez Brings Forward Release Of Results To April 23
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Today : Friday 20 April 2012
French power utility GDF Suez (GSZ.FR) Friday said it has moved ahead the release of its first-quarter results to April 23 at 1200 GMT, instead of April 24, as was originally scheduled.
The company will release the data half an hour before the beginning of its annual shareholders general meeting, a statement said. GDF Suez didn't give any reason for the change.
-By Inti Landauro, Dow Jones Newswires; [phone]; [e-mail]

[waldron] 20/4/2012 09:24

Suez Environnement Keeps 2012 Targets After Lower 1Q Ebitda
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Today : Friday 20 April 2012
Suez Environnement SA (SEV.FR) Friday said it remains confident in the achievement of its 2012 objectives, despite a slowdown in waste volumes in the first quarter which brought its earnings before interest, tax, depreciation and amortization, or Ebitda, for the period down compared to a year earlier.
MAIN FACTS:
- The group's Ebitda in the first quarter was down 4.5% to EUR566 million, from EUR592 million a year earlier while its Ebitda margin stood at 15.8%. The Ebitda was affected in Waste in Europe by a decrease in volumes treated, in a difficult macro-economic context and with an unfavourable climate in February, it said.
- Suez Environnement said it nevertheless remains confident in the achievement of its annual objectives and its Chief Executive Jean-Louis Chaussade said the company "plans to reinforce its efforts on profitability and cash flow generation for 2012."
- The group expects higher or at least similar revenue, Ebitda and free cash flow from 2011, and targets Ebitda of EUR2.7 billion at constant foreign exchange rates in 2013, while it plans to be more selective in its investments from now on, with investments capped at EUR1.3 billion in 2012 and 2013.
- "In a difficult economic context in Europe, and with the beginning of the year affected by adverse climatic conditions, the results for the first quarter have been impacted by the slowdown of treated waste volumes. Nevertheless, the Water business both in Europe and in our International divisions has shown good growth, as illustrated by the signature of the new water and wastewater operation contract for the city of Perth," Chaussade also said.
- Revenue in the first quarter grew grew 2.2% at EUR3.59 billion from EUR3.51 billion, representing a 1.4% organic growth rate.
- All divisions are growing organically: +2.8% for Water in Europe, +1.2% for Waste in Europe and +0.4% for International (+2.3%, excluding Melbourne desalination plant which finalization is underway).
- Suez Environnement said it continues its business development, with the gain of contracts such as Perth (Australia), Neuilly-sur-Seine (France) in water or Neuwied (Germany) in waste. The group is impacted by scope effects related to the disposals of Bristol Water (United Kingdom) and Eurawasser (Germany), completed in October 2011 and February 2012 respectively.
- By Geraldine Amiel, Dow Jones Newswires; [phone]; [e-mail]

[waldron] 19/4/2012 08:40

International Power Quarterly Revenue Up 5%, Assets Perform Well
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Today : Thursday 19 April 2012
International Power PLC (IPR.LN), the power generation group, said Thursday that revenue for the three months ended March 31 was up 5% from the same period the previous year at EUR4.26 billion, adding that the portfolio of assets has continued to perform well and in line with expectations.
MAIN FACTS:
-There has been no material change to financial position since the preliminary results were published in February.
-Company remains confident of delivering further growth in 2012, driven by full-year contributions from new plants that became operational in late 2011 and new capacity expected to come on line during 2012.
-Shares closed Wednesday at 417.5 pence valuing the company at GBP21.27 billion.
-By Rory Gallivan, Dow Jones Newswires; 44-20-7842-9411; [e-mail]
Order free Annual Report for International Power Plc
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[waldron] 18/4/2012 15:14

Nord Stream: Completed Line 2 Construction, Operational End 2012
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Today : Wednesday 18 April 2012
International pipeline consortium Nord Stream has completed the second of its twin gas pipelines through the Baltic Sea ahead of schedule, the company said Wednesday, with the operational transit of gas set to begin this year.
"Following extensive pre-commissioning and commissioning, Line 2 is scheduled to begin transporting gas towards the end of 2012 as part of a fully automated twin-pipeline gas transport system capable of transporting 55 billion cubic meters of gas per year from Russia to the European Union, for at least 50 years," the company said.
Line 1 started transporting gas November. When fully operational the twin pipelines will have "enough capacity to satisfy the energy demand of more than 26 million European households," according to the consortium's website.
The consortium is 51%-owned by Russian state gas firm OAO Gazprom (GAZP.RS) with BASF SE's (BAS.XE) Wintershall AG, E.ON Ruhrgas AG, Nederlandse Gasunie NV and GDF Suez SA (GSZ.FR) as minority shareholders.
Nord Stream was established in 2005 for the planning, construction and subsequent operation of two 1,224-kilometre natural gas pipelines through the Baltic Sea.
The company added the pre-commissioning work for the line has already started. Each of the three sections will be flooded with seawater, cleaned and gauged, and thoroughly pressure tested.
After de-watering and drying, the completed pipeline will then be linked to the landfalls in Russia and Germany and put into operation towards the end of the year.
-By Alexander Kolyandr, Dow Jones Newswires; [phone] [e-mail]

[waldron] 17/4/2012 13:09

UPDATE: GDF Suez, GAIL To Build India's First Floating LNG Terminal
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Today : Tuesday 17 April 2012
French power company GDF Suez SA (GSZ.FR), GAIL (India) Ltd. (532155.BY) and the southern Indian state of Andhra Pradesh Tuesday agreed to set up the South Asian nation's first floating terminal to import liquefied natural gas.
The terminal, on India's east coast, will have an annual capacity of 3.5 million tons and will likely be commissioned by the end of 2013.
GDF Suez will hold a 26% stake in the import terminal and Andhra Pradesh Gas Distribution Corp. will have the remainder, the companies said in a statement. The companies didn't give any investment projections for the project.
Andhra Pradesh Gas Distribution is owned jointly by GAIL Gas Ltd.--a 100% unit of pipeline utility GAIL (India)--and Andhra Pradesh Gas Infrastructure Corp.
India's annual LNG capacity is estimated to reach 50 million tons by 2017 from about 13.5 million tons, as local gas shortages are driving demand for the imported fuel.
A floating LNG terminal is a low-cost solution to imports as it can be set up quickly--within 18 months compared with about six years for an onland terminal--and also needs lesser capital investment as it doesn't involve purchase of assets such as land.
GAIL would source LNG for the terminal from GDF Suez, GAIL Director Marketing Prabhat Singh told reporters.
The deal reflects GDF's focus on India where it already holds a 10% stake in Petronet LNG Ltd., the nation's largest LNG importer by volume.
Jean-Marie Dauger, executive vice president at GDF, said that India, "and more generally Asia," is a core development region for the company's LNG business.
-By Rakesh Sharma, Dow Jones Newswires; [phone]; [e-mail]

[waldron] 17/4/2012 12:59

GDF SUEZ : Oddo relève à Neutre

(AOF) - Oddo a relevé sa recommandation d'Alléger à Neutre ainsi que son objectif de cours de 18 à 20 euros sur GDF Suez suite à l'annonce du rachat des minoritaires d'International Power (IPR).

[waldron] 17/4/2012 10:04

GAIL India Signs Pact With GDF Suez To Build Floating LNG Terminal
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Today : Tuesday 17 April 2012
GAIL (India) Ltd. (532155.BY) and the government of Andhra Pradesh state Tuesday signed an initial pact with French power company GDF Suez SA (GSZ.FR) to build a floating terminal for liquefied natural gas in the country.
Andhra Pradesh Gas Distribution Corp., a company owned jointly owned by GAIL Gas Ltd.--a wholly-owned unit of GAIL--and Andhra Pradesh Gas Infrastructure Corp. signed the pact, the companies said in a joint statement.
The companies aim to commission the terminal by the end of December 2013.
-By Rakesh Sharma, Dow Jones Newswires; [phone]; [e-mail]

[waldron] 17/4/2012 08:31

GDF Suez To Unveil New Nuclear Strategy By Mid-Year
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Today : Tuesday 17 April 2012
French power group GDF Suez SA (GSZ.FR) will unveil its new nuclear strategy by mid-year, its chief executive said Monday, following key political decisions in Belgium and the outcome of the French presidential election.
GDF Suez, which is a far bigger player in natural gas and other fuels compared with nuclear, plans to keep some nuclear activities. The question is how much.
The group owns and operates seven nuclear reactors in Belgium and seeks to build and operate a medium-size third-generation nuclear reactor in France. GDF Suez is also interested by potential nuclear activities in the Czech Republic and Poland.
GDF Suez is waiting for the Belgian government's decision on potentially extending reactors lifespan, its Chairman and Chief Executive Gerard Mestrallet said Monday. Belgium in 2003 enacted a law to phase out nuclear power, but recent comments from senior Belgium officials suggest the country could delay such a move.
Following the Fukushima nuclear disaster in March last year, several European governments have reviewed their energy mix and the Belgian government signaled at the start of this year that it would decide whether to extend the reactors' lifespan in six months-time.
Belgium earlier this year enacted a new tax on nuclear power.
The midyear time-frame would also give GDF Suez a chance to integrate into its strategy the outcome of the French presidential election.
French Socialist candidate Francois Hollande, who's currently leading the polls to take over from right-wing president Nicolas Sarkozy, plans to gradually lower the share of nuclear in France's energy mix to 50% from nearly 80% now by 2025-2030, while Sarkozy's government has reaffirmed its pro-nuclear stance following Fukushima.
- By Geraldine Amiel, Dow Jones Newswires; [phone]; [e-mail]

[waldron] 17/4/2012 07:14

GDF Suez's nuclear reservations hit government energy policyFrench firm needs more financial incentives if it is to proceed with new nuclear plant in Cumbria, says CEO Gérard Mestrallet


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guardian.co.uk, Monday 16 April 2012 16.39 BST Article history
GDF Suez's chief executive Gérard Mestrallet says the government's proposed fixed carbon price is not enough. Photograph: Eric Piermont/AFP/Getty Images
The government's energy policy has suffered a fresh blow when GDF Suez, the French firm behind plans to build a new nuclear plant in Cumbria, said it needed more financial incentives if it was to proceed.

Gérard Mestrallet, chairman and chief executive of GDF, said he wanted talks with the government about the right fixed or minimum price for producing nuclear energy: "We are, with our partners, going to take a decision in 2015 [on building a new plant at Sellafield]. Today it is very difficult to invest in a nuclear power plant without clear visibility."

The government has promised to provide a fixed carbon price to make nuclear investment more attractive, and has proposed a "contract for difference" which some say will act as a price guarantee. But Mestrallet said what was on offer was "not enough and something is missing".

The comments will send a shockwave through Whitehall because they come just weeks after the German utilities RWE and E.ON said they would not proceed with plans to build new nuclear plants at Wylfa in Wales and Oldbury in Gloucestershire.

The German firms run the Horizon joint venture in Britain. They cited concerns about financing the projects as well as costs associated with Germany's abandonment of nuclear power in the aftermath of the Fukushima accident in Japan. This would leave only GDF and the major French electricity producer EDF in the race to build new atomic plants in the UK.

GDF has its own joint venture with Iberdrola of Spain called NuGen which insisted after the E.ON and RWE announcement that it remained "committed" to its planned 3.6 gigawatt plant at Sellafield.

But Mestrallet's words make clear that GDF will only proceed if the British government makes further concessions to nuclear, something industry critics feared would happen.

The GDF warning came as the French grip on Britain's energy infrastructure tightened with a plan to take full control of International Power (IP) for about £6.5bn.

IP operates key power stations around the country including the gas-fired plant at Satend near Hull and a coal-fired facility at Rugely, in Staffordshire, as well as many others abroad.

The move could exacerbate concerns about the undue influence of companies partly owned by the French state such as EDF, Areva and GDF – which have already big stakes in the British energy market. The French government is the biggest shareholder in GDF with 36%.

GDF, the world's largest independent power producer, bought 70% of IP in 2010, but has now agreed to buy the remaining stake for 418p a share.

Mestrallet said the acquisition of the minority stake in IP constituted a major step that would "allow the group to fully capture growth in fast growing markets".

He denied further control by GDF of the UK business could be anything but good and said EDF was a "competitor" not a French state collaborator.

An earlier offer from GDF at 390p a share had been resisted by the British company's board but Sir Neville Sims, chairman of the committee of independent directors at IP, said he had no difficulty recommending the new offer.

It represented a price that "fairly reflects the company's position in international power generation markets and its inherent growth potential," he said.

The independent directors will recommend that shareholders vote in favour of the deal at the annual meeting on 15 May. The deal would be the second biggest this year after Glencore International's offer for mining group Xstrata.

Angelos Anastasiou, a utility analyst with Investec Securities, said this was the right price for a business of this sort, adding: "We see the offer progressing smoothly to its conclusion."

But the acquisition by GDF follows the purchase by EDF of nuclear operator British Energy and the growing influence of French nuclear engineering firm, Areva.

Jonathon Porritt, director of sustainability group Forum for the Future, recently expressed deep misgivings about the situation. He said in the Guardian last month: "UK energy policy is being manipulated and subverted to make it possible for French nuclear power companies (EDF and Areva) to start building four new reactors in the UK – two at Hinkley Point in Somerset and two at Sizewell in Suffolk."

IP runs six UK power stations including some wind farms. It has recently reduced the power output from a Teesside gas plant from 1,875 megawatts to 45MW, describing the commercial environment in Britain as "challenging".

But of particular interest to GDF is IP's 6,600-MW building programme abroad, mostly in developing countries. Almost three-quarters of recent operating income has come from nations like Brazil, Indonesia and Saudi Arabia.

[waldron] 16/4/2012 18:36

GDF Suez To Unveil New Nuclear Strategy By Mid-Year
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Today : Monday 16 April 2012
French power group GDF Suez SA (GSZ.FR) will unveil its new nuclear strategy by mid-year, its chief executive said Monday, following key political decisions in Belgium and the outcome of the French presidential election.
GDF Suez, which is a far bigger player in natural gas and other fuels compared with nuclear, plans to keep some nuclear activities. The question is how much.
The group owns and operates seven nuclear reactors in Belgium and seeks to build and operate a medium-size third-generation nuclear reactor in France. GDF Suez is also interested by potential nuclear activities in the Czech Republic and Poland.
GDF Suez is waiting for the Belgian government's decision on potentially extending reactors lifespan, its Chairman and Chief Executive Gerard Mestrallet said Monday. Belgium in 2003 enacted a law to phase out nuclear power, but recent comments from senior Belgium officials suggest the country could delay such a move.
Following the Fukushima nuclear disaster in March last year, several European governments have reviewed their energy mix and the Belgian government signaled at the start of this year that it would decide whether to extend the reactors' lifespan in six months-time.
Belgium earlier this year enacted a new tax on nuclear power.
The midyear time-frame would also give GDF Suez a chance to integrate into its strategy the outcome of the French presidential election.
French Socialist candidate Francois Hollande, who's currently leading the polls to take over from right-wing president Nicolas Sarkozy, plans to gradually lower the share of nuclear in France's energy mix to 50% from nearly 80% now by 2025-2030, while Sarkozy's government has reaffirmed its pro-nuclear stance following Fukushima.
- By Geraldine Amiel, Dow Jones Newswires; [phone]; [e-mail]

[waldron] 16/4/2012 17:54

3rdUPDATE:GDF Suez,International Power Settle Over Higher Price
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Today : Monday 16 April 2012
PARIS (Dow Jones) -- GDF Suez SA (GSZ.FR) and the independent directors of International Power PLC (IPR.LN) said Monday they settled on a cash offer at 418 pence for each International Power share the French utility doesn't own, well above the 390 pence GDF Suez initially indicated it would be willing to pay, putting an end to a three-week standoff and sealing the second biggest M&A transaction of the year.
The cash offer values the U.K.-based power distributor--of which GDF Suez bought 70% in February, 2011--at GBP22.8 billion, up from around GBP19.9 billion at the previous indicative price.
Taking full control of International Power is at the heart of the French utility's strategy of increasing its exposure to booming emerging markets. By doing so, it will help to offset its slower performance in more mature markets such as France and the rest of Europe, where GDF Suez faces economic headwinds from the euro zone's sovereign-debt crisis and political risk stemming from the French government's strong involvement in the energy sector.
The deal's impact on GDF Suez's net debt is EUR 8.4 billion, as GDF Suez will pay EUR7.7 billion in cash and take on a bit more than EUR600 million of International Power debt. As the group will get also some IPR convertible bonds, and pay them in cash, it could have to pay an additional EUR1.8 billion, the group's Chief Financial officer Isabelle Kocher said during a press conference.
International Power shareholders will still be able to receive the group's 2011 final dividend of 6.6 euro cents per share.
""The acquisition of the minority stake in International Power, based on a strict financial discipline, constitutes a major step in the development of the group. It will allow the Group to fully capture growth in fast growing markets," GDF Suez's Chairman and Chief Executive Gerard Mestrallet said, noting that the deal is the second biggest M&A transaction after this year commodities trader Glencore PLC's (GLEN.LN) $37 billion takeover of miner Xstrata PLC (XTA.LN).
The move puts an end to a three-week standoff, after some International Power shareholders rejected the initial non-binding approach from GDF Suez, which they considered to be "undervaluing" International Power. GDF Suez at one point even threatened to simply drop any tentative approach.
GDF Suez and International Power agreed last year that if GDF Suez would seek to buy minorities out before Aug. 3, 2012, the approval of the independent directors would be mandatory.
The recommendation is the first step and makes the offer a formal one, whereas the previously mentioned price was only indicative. The official scheme document will be sent to shareholders before May 14, and the offer will be put to shareholders by June during a general shareholders' meeting. The deal is expected to be finalized by mid-July.
The initial reaction from IPR's minority shareholders has been quite positive, Kocher said, echoing comments by an advising banker.
"People from International Power would have probably liked a higher price while (GDF Suez Chairman and Chief Executive Gerard) Mestrallet would have of course liked to pay a little less," the banker said, under conditions of anonymity. The new price "is high but it is not extravagant," he added and all parties are confident that the transaction will proceed smoothly.
The price represents a 20.8% premium since Feb.29, "the last business day before press and market speculation intensified that GDF Suez would make an offer for International Power," GDF Suez and International Power's independent directors said.
By mid-afternoon, shares in GDF Suez were trading around 3% higher at EUR18.48 while the CAC-40 benchmark index was up 0.6%. Shares in International Power were up about 3x%, or 12.9 pence, at 416.8 pence, while the FTSE 100 was down around 0.4%.
"This deal is broadly value neutral for GDF Suez, but strategically positive for the group," Canaccord Genuity analysts said. "For GDF Suez, we also believe this deal is consistent with the company retaining its 'A' credit rating and with it continuing to be able to maintain its EUR1.5 per share dividend." They rate GDF Suez at buy.
GDF Suez now expects its net recurring profit group share for 2012 to be around EUR3.7 billion to EUR4.2 billion, up from an initial objective of EUR3.5 billion to EUR4 billion, .
The French utility will finance a third of the cash offer from its own equity, as it offered to pay part of the 2011 and the 2012 dividends in GDF Suez shares instead of cash. It has also increased its divestiture program and now plans to sell an additional EUR3 billion worth of assets, from an initial objective of EUR10 billion in disposals.
Most of the assets to be sold will be in mature markets, such as the U.S., Kocher said. Yet the group won't sell assets in France and Belgium, its historical markets. It intends to retain its controlling share of more than 35% in waste and water utility Suez Environnement Sa (SEV.FR), she also said.
As the integration of International Power is to increase the group's exposure to emerging markets, GDF Suez intends to also increase its planned capital expenditures in those areas in the medium term, so that they represent 40% to 50% of its total capex, from an initial target of 30%, Mestrallet said.
- By Geraldine Amiel, Dow Jones Newswires; [phone]; [e-mail]