GDF SUEZ 2010: Implementing a 'Megamerger' in Europe

The GDF SUEZ "megamerger" has been one of the largest deals in Europe. While this merger made sense in strategic terms, it took four years (2004-2008) to complete it, for a series of political and social issues. GDF and Suez top executives, and Suez CEO Gérard Mestrallet in particular, had to have a very strong motivation to pull the project through, which suggests that this merger created substantial gains for both companies. The merger indeed created significant synergies and it was well received by the financial markets. It entailed a spin-off of Suez Environment, in the equity of which GDF SUEZ retained only 35%. The issue at hand now is to design a consistent strategy and organizational structure to manage the first utility company in the world.

Comment the hurdles that the two companies had to overcome in order to pull the project through. Why did GDF and Suez merge? Did the GDF SUEZ merger create value? Why and how? How does this move compare to the 1997 Lyonnaise-Suez merger? Was the spin-off of Suez Environnement a good decision?

Merger - Acquisition - Energy - Value creation - Corporate strategy - Synergy - Stock market - Stock price

Public Schools - MBA - Executive programs

Energy

The GDF SUEZ case aims at discussing the merger between GDF and Suez, as well as the corporate strategy of the merged company after the deal. The author suggests starting the case discussion by commenting the hurdles that the two companies had to overcome in order to pull the project through. This will set the stage and highlight the strength of the companies' top executives motivations for making this merger happen. The discussion can then address value creation and synergy issues, with the analysis of market reactions to merger announcements. The participants can finally assess the actual synergies in the business portfolio and make strategic and organizational recommendations for GDF SUEZ after the merger. An additional and detailed teaching note is included in the case.
French version is also available.

Année de la problématique : 2010

Livraison : Livraison par lien de téléchargement

Nombre de pages : 35