French energy giants merge as world No 4

FRENCH utility groups Suez and Gaz de France (GDF) have agreed to merge to create the world's fourth-largest energy firm worth 90 billion (£61bn) - a deal hotly opposed by unions, which fear it will cause job losses.

The French government will hold more than 35 per cent of the new firm, to be called GDF Suez. It currently owns 80 per cent of GDF, and was keen to prevent Suez from merging with the Italian energy company Enel.

The new combined business will have annual revenues of 72bn and a workforce of 200,000.

Suez's water and environment business, valued at up to 20bn, will be spun off as a separate business, with its existing shareholders handed a 65 per cent stake. This business runs SITA in the UK, a waste management and recycling firm that runs joint ventures with Surrey County Council and seven north London borough councils.

GDF Suez will be the fourth-largest energy player in the world, behind Russia's Gazprom, Electricite de France and E.ON of Germany. The group will also be the number one buyer and seller of gas in Europe, and the fifth-biggest power producer in Europe.

GDF is already one of the biggest suppliers of gas to the UK and one of the most active explorers in the North Sea.

• HSBC, which has been trying to secure a landmark deal in Korea for eight years, has agreed to pay the investment group Lone Star about $6.3bn in cash to acquire a majority stake in Korea Exchange Bank.

But Europe's largest bank by assets said completion was contingent on a raft of conditions being met by next April, which include all government and regulatory approvals.