Gaz de France handed an olive branch to unions over jobs to seal its delayed merger with private utility Suez as it unveiled forecast-beating 2007 results, sending its shares higher. The state-controlled gas provider stuck to its forecasts for 2008 on Wednesday.
Echoing upbeat comments and record results from merger partner Suez a day earlier and deflecting investors' concerns about merger delays and jitters in the utility sector. GDF shares were 2.2 percent higher at 38.2 euros at 1249 GMT. After almost two years of political delays, GDF expects to merge with Suez by the middle of the year in a 90 billion euro ($135.4 billion) combination creating Europe's second-largest energy utility.
But a French judge recently ordered GDF to give more information to unions, leaving doubts over the final timing of the deal which must also be approved by shareholders and courts. Chief Executive Jean-Francois Cirelli said talks with unions were going more smoothly and offered to meet their concerns about jobs and the way in which workers would be represented.
"Our staff representatives want extra commitments and stronger guarantees than we have so far given on employment or dialogue at a European level," Cirelli told a news conference. "I am ready to give these guarantees and to move forward with our personnel representatives," he said. "I think that today we have moved into a more constructive phase of dialogue with the European works council and our central works council."
The works councils cannot veto the deal but have a right to be consulted and have so far refused to give a formal opinion. A French court handed GDF a list of points to clarify and Cirelli said this would be done in time for a central works council opinion to be provided some time during April. "We are clearly within the timetable of first half 2008 (for completing the merger," he said.
"That's our aim and there is no need to doubt it will happen." Suez repeated the mid-year target on Wednesday while saying a few weeks' delay would not matter. A sister administration of the current conservative government engineered the merger in 2006 in response to the threat of a bid for Suez from Italian utility Enel.