GDF Suez

Engie SA is a French multinational utility company, headquartered in La Défense, Courbevoie, which operates in the fields of energy transition, electricity generation and distribution, natural gas, nuclear, renewable energy and petroleum.

It is one of the few players in the sector to develop expert skills in both upstream (engineering, purchasing, operation, maintenance) and downstream (waste management, dismantling) activities.

Engie supplies electricity in 27 countries in Europe and 48 countries worldwide.

The company, formed on 22 July 2008 by the merger of Gaz de France and Suez, traces its origins to the Universal Suez Canal Company founded in 1858 to construct the Suez Canal.

As of 2018, Engie employed 158,505 people worldwide with revenues of €60.6 billion.

Engie is listed on the Euronext exchanges in Paris and Brussels and is a constituent of the CAC 40 index.

Engie was headed from 2016 to 2020 by Isabelle Kocher, who strongly transformed the company, notably by deciding to exit coal activities and by investing massively in renewable energy and energy transition services.

During its General Meeting on 14 May 2020, Engie's board of directors approved its mission statement, which is "to act to accelerate the transition towards a carbon-neutral economy, through reduced energy consumption and more environmentally-friendly solutions".

History

Background (before 2006)

Prior to the GDF Suez merger plans in 2006, the company existed as two separate French multinational corporations - Suez S.A. and Gaz de France.

Suez was (and still remains, through GDF Suez) one of the oldest continuously existing multinational corporations in the world as the result of nearly two centuries of reorganisation and corporate mergers. One line of corporate history dates back to the 1822 founded ''Algemeene Nederlandsche Maatschappij ter begunstiging van de volksvlijt'' (literally: General Dutch Company for the favouring of industry) by King William I of the Netherlands (see Société Générale de Belgique). The origin of its name 'Suez' traces back to its other founding entity – the '' Compagnie universelle du canal maritime de Suez'' founded in 1858 to build the Suez Canal. Suez S.A. was the result of a 1997 merger between the '' Compagnie de Suez'' and '.

Gaz de France was created in 1946 along with its sister company Électricité de France (EDF) by the French Government. After the liberalisation of Europe's energy markets, Gaz de France also entered into the electricity sector, having developed combined natural gas-electricity offerings. The company's capital was partially floated on the Paris Stock Exchange in July 2005, raising €2.5 billion for the French Government.

Evolution of GDF Suez (2006 - 2008)

On 25 February 2006, French Prime minister Dominique de Villepin announced the merger of water supply and treatment, waste management and energy company Suez and power firm Gaz de France, with the aim of creating the world's largest liquefied natural gas company. Since the French state owned over 80% of Gaz de France, it was necessary to pass a new law in order to make the merger possible. Whilst Nicolas Sarkozy was for several months opposed to the Villepin government's plans for a merger of the two companies, preferring a three-way deal with Italy's Enel which would maintain a controlling stake for the state, he subsequently accepted the government proposal.

The plan for a merger between Gaz de France and Suez came under fire from the whole of the political left, which feared the loss of one of the last ways of preventing the price rises experienced over the previous three years, and by the social Gaullists and trade unions. In August 2006, the left-wing opposition submitted a record-breaking 137,449 amendments to the proposed legislation. Under normal procedure, parliament would have been required to vote on the amendments, which would have taken 10 years. The French Constitution does give the government options to bypass such a filibuster, but in the end these were not used.

Law No. 2006-1537 of 7 December 2006 on the energy sector authorised the privatisation of Gaz de France. On 3 September 2007, Gaz de France and Suez announced agreed terms of merger, on the basis of an exchange of 21 Gaz de France shares for 22 Suez shares via the absorption of Suez by Gaz de France. Various holdings of Gaz de France and Suez had to be divested in order to satisfy the concerns of the European Commissioner for Competition: GDF agreed to sell its approximate 25% stake in Belgian electricity producer SPE for €515 million. The stake was purchased by fellow SPE shareholder Centrica which exercised its right of first refusal, blocking a previous agreement to sell the stake to Électricité de France. Suez, meanwhile, was forced to reduce its shareholding in natural gas distributor Fluxys and sell its Belgian gas supply subsidiary Distrigas to Eni.

GDF Suez (2008 - 2015)

The newly created GDF Suez came into existence on 22 July 2008; the world's second-largest utility with over €74 billion in annual revenues. The deal resulted in the conversion of the French state's 80% stake in GDF into just over 35% of shares of the new company. The water and waste assets which formerly formed part of Suez were spun off into a new publicly traded company, Suez Environment, in which GDF Suez retains a stake.

In 1975, Ruhrgas and Gaz de France concluded a deal according to which they agreed not to sell gas in each other's home market. The deal was abandoned in 2005.

In July 2009, the European Commission fined GDF Suez and E.ON €553 million both over arrangements on the MEGAL pipeline.

It was the second biggest fines imposed by the European Commission and the first one on the energy sector.

In October 2009, GDF Suez placed 6th in an A.T. Kearney/''BusinessWeek'' ranking of the "World's Best Companies", the highest-placed European firm.

On 10 August 2010, the company announced a merger of its GDF SUEZ Energy International business unit, along with its operations within the United Kingdom and Turkey, with International Power. The acquisition created the world's biggest independent power producer, and the enlarged company retained International Power's listing on the London Stock Exchange and was 70% owned by GDF Suez.

In December 2010, GDF SUEZ became the key founding member of the 'Medgrid' company - a consortium of twenty plus utilities, grid operators, equipment makers, financing institutions and investors; which will implement the Medgrid project, a French renewable energy initiative within the framework of the Union for the Mediterranean (UfM). The project, planned in North Africa, aims to promote and develop a Euro-Mediterranean electricity network of 20 GW installed generating capacity, with 5 GW being devoted for exports to Europe. The Medgrid together with the German initiated Desertec project would serve as the backbone of the European Supergrid.

On 16 April 2012, the purchase of the remaining 30% of International Power was announced by GDF Suez, and the transaction completed in July 2012. GDF Suez was advised by Rothschild and Ondra Partners, while Barclays, Morgan Stanley and Nomura advised International Power.

On 9 August 2013, GDF Suez, through its Energy Services business line, announced the purchase of Balfour Beatty's UK Facilities Management business – Balfour Beatty WorkPlace. The legacy Cofely business incorporated the legacy Balfour Beatty Workplace Business which went on to acquire Lend Lease FM in 2014 from Lendlease giving the new business a substantial platform in the operation of PFI assets in the UK.

GDF Suez becomes Engie: 2015 – present

On 24 April 2015 GDF Suez announced it was changing its name to "Engie", in an effort to further expand the company's international footprint. CEO and Chairman Gérard Mestrallet said the new name was a symbol to meet the challenges of the energy transition and accelerate the group's development. The subsidiary International Power became Engie Energy International.

In July 2015, Engie acquired 95% of Solairedirect, raising its photovoltaic production from 125 to 486 MW.

On 2 March 2017, Engie acquired Keepmoat Regeneration for £330m to form the places and communities division, headed up by Keepmoat LTD's former CEO Dave Sheridan. The new division is focused on three key activities; energy, services and regeneration.

GDF Suez has been ranked as among the 13th best of 92 oil, gas, and mining companies on indigenous rights and resource extraction in the Arctic.

In April 2019, Engie announced the acquisition of 90% of Transportadora Associada de Gás (TAG), Brazil's largest natural gas transmission system owner (2,800 miles of pipeline, 47% of the country's gas infrastructure), for €7.7 billion.

It is the largest acquisition since International Power in 2010. The operation allows Engie to develop on its strategic axis of energy infrastructure as well as in Brazil, one of the priority countries.

In February 2020, the board of directors announces that it will not propose the reappointment of Isabelle Kocher at the next shareholders' meeting, which will bring to an end of her chief executive officer position.

In 2021, Engie was ranked fiftieth in the Arctic Environmental Responsibility Index (AERI) that covers 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle.

Strategy

Transformation of the company's business

Since 2014, Engie has operated a strategic shift, by reducing future exploration in fossil fuels and investing massively in renewable energies (solar, wind, geothermal, biomass, hydroelectric, and nuclear) and energy efficiency services.

In 2015, Engie announced its decision to stop new investments in coal plants and to dispose of €15 billion in assets in order to reinvest into projects that promote low-carbon, distributed-energy. Engie also announced it will invest €22bn in renewable energies, energy services such as heating and cooling networks, and decentralized energy technology.

In 2016, Isabelle Kocher defined the strategy of Engie as follows: to promote decarbonized energy (oil and coal replaced by renewables and natural gas that emit less greenhouse gases), decentralized energy (energy produced and stored as close as possible to its place of consumption), and digitized energy (big data and digital tools for energy efficiency and network management). The group created Engie Digital and planned to invest €1.5 billion on digital and new technologies related to energy.

Engie also started promoting an open innovation approach with a dedicated entity named "Engie Fab" focused on the development of intelligent networks (smart grids), Internet of objects, green mobility, energy storage, and hydrogen.

Between 2016 and 2018, Engie invested €15 billion in new activities, financed by the sale of coal and upstream oil and gas.

2019-2021 strategic plan

In 2019, Isabelle Kocher announces the strategic plan of the company for the 2019-2021 period, with an ambition to become the world leader in the zero-carbon transition. The strategic shift includes accelerating its investments in renewable energies and focusing on high-value-added services to the clients.

Isabelle Kocher announces the definitive exit of coal activities. Engie plans to invest another €12 billion in renewable activities, partly financed by the sale of €6 billion assets (including the last coal plants).

The 12 billion break down as follows: 3 to 3.3 billion into gas infrastructure; 4 to 5 billion into client services and solutions; and 2.3 to 2.8 billion into renewable energies, adding a 9 GWh production capacity, to reach a renewable installed capacity of 52 to 64 GW by 2026.

As far as the services are concerned, Isabelle Kocher's plan is to develop "energy transition as a service" for large companies and metropolises, whom she says are driving the "second wave of energy transition" by searching ways to reduce their carbon emissions (the first wave having been driven by the states). She also says it might be "the invention of a new industry" of a 1 billion dollar potential value.

Engie also announces its intention to leave 20 of the 70 countries where it is active, and focus its activities on 20 countries and 30 metropolitan areas, mainly in Southeast Asia and Africa.

Operations

Power generation

France

Thanks to former Suez subsidiaries such as Compagnie Nationale du Rhône (CNR), Electrabel and (SHEM), GDF Suez is the second-largest generator of electricity in France behind EDF. The company indicated in December 2011 that of the group's production comes from sources that emit no CO₂ principally hydroelectricity (through CNR and SHEM) and wind power, the latter of which both Gaz de France and Suez moved aggressively into in 2007 and 2008. Recently acquired subsidiaries include (majority stake), the wind farm business of Nass & Wind and Erelia. The company also operates a natural gas-fired combined cycle power plant (DK6) in Dunkirk

HOME


Content is Copyleft
Website design, code, and AI is Copyrighted (c) 2014-2017 by Stephen Payne


Consider donating to Wikimedia



As an Amazon Associate I earn from qualifying purchases