UPDATE 4-Suez beats earnings forecasts, defends GDF merger

(Recasts with details from Suez AGM)

By Marie Maitre and Benjamin Mallet

PARIS, May 6 (Reuters) - Suez (LYOE.PA: Quote, Profile, Research) posted first-quarter earnings that beat market expectations on Tuesday, and defended its upcoming merger with Gaz de France GAZ.PA in front of some feisty shareholders, saying the deal would create value.

Chief Executive Gerard Mestrallet told a shareholder meeting he was "totally confident" Suez's 100 billion-euro ($155 billion) merger with GDF would complete by mid-year as scheduled, and sought to dismiss criticism that GDF may be a "dead weight" for Suez.

"GDF is a great company ... this is a logical union and an extremely powerful industrial alliance which will create value for you," Mestrallet said.

In a sometimes electric atmosphere, several shareholders said Suez was strong enough to pursue a standalone strategy, while another accused Mestrallet of pressuring shareholders into the merger, prompting applause and one shout of "resignation".

"This (the merger) will be up to you to judge," Mestrallet replied, referring to the extraordinary shareholder meeting on the tie-up that Suez hopes to hold within weeks.

The timing of this vote is uncertain though, as Suez and GDF must wait for GDF's CCE works council to give its opinion on the deal before they can call extraordinary shareholder meetings.

The CCE's opinion is non-binding but has been delayed for several months, with labour unions accusing GDF's management of not giving them all the information they needed on the deal.