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Engie's CGT union says RWE alliance could make sense
May 22, 2017 / 3:05 PM / 6 months ago

Engie's CGT union says RWE alliance could make sense

* No information internally about possible tie-up with RWE

* CGT says not essential for state to hold 33 pct of Engie

PARIS, May 22 (Reuters) - A Franco-German alliance between Engie and RWE could make sense from an industrial point of view, provided it has no impact on jobs, Engie’s top union official told Reuters on Monday.

Sources familiar with the situation told Reuters on Friday that the two utilities were studying a deal under which RWE could swap its majority stake in renewable energy and grids unit Innogy for a minority stake in Engie.

“This is still vague but it perfectly fits the current European project of (Engie chief executive) Isabelle Kocher,” Engie’s CGT union central coordinator Eric Buttazzoni said.

He said that internally no information had been given about possible talks with RWE, but that from an industrial perspective such a project could make sense.

A swap would automatically reduce the share of the French state in Engie’s capital, which currently stands at 28.65 percent.

Following the 2008 merger between Gaz de France and Suez that formed GDF Suez, the government - under union pressure - wrote into law that the French state should always control at least one third of the utility’s capital.

But the state’s share in GDF Suez, renamed Engie in 2015, has already fallen below that level following stake sales earlier this year, using the double vote provisions of the Florange law under which it can halve its capital stake but keep the same level of control.

Buttazzoni said it would make little difference whether or not the state goes back to a one-third stake or not.

“The state approves all the company’s decisions and is there only to cash its dividends. In my view, the state is no longer looking after us and it makes no difference whether or not it holds a third of the capital or not,” Buttazzoni said.

Reporting by Benjamin Mallet; Writing by Geert De Clercq; Editing by Keith Weir

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