GDF Suez plans two-three billion euros in takeovers per year
PARIS (Reuters) - French gas and power group GDF Suez plans two to three billion euros of "rotational" takeovers per year in the next three years but is not eying a major transformational merger operation, its chief executive said on Thursday.
GDF Suez Chairman and CEO Gerard Mestrallet told an earnings conference that GDF Suez is permanently studying lots of possible takeover targets and that in the first half of this year alone the firm had looked at targets with a combined worth of 20 billion euros (£15.86 billion), but had eliminated those that did not meet its investment criteria.
"In the three years to come, we intend to realise, on average, between two and three billions euros of M&A operations per year, so six to nine billion over the period," Mestrallet said.
He added that he was not looking for transformative, big acquisitions, but for small or medium-sized ones, and that these will be financed by asset sales.
Mestrallet has said before that the company plans to focus its investments on power production in fast-growing emerging economies and on Europe's shift to renewables and energy efficiency.
Asked whether GDF Suez would be willing to sell some of its regulated assets in Europe in order to reinvest in emerging markets, Mestrallet said the firm had no intention to do this.
He said this was not a matter of principle, as GDF Suez had already sold a 25 percent stake in its natural gas transport subsidiary GRTgaz to a consortium led by French state-owned financial institution Caisse des Depots in 2011.
"In any case, we want to keep the control of our activities, and our asset rotation programme can be reached without sales of our infrastructures," he said.
Mestrallet's comments are likely to dampen market speculation that he hopes to clinch one major deal before the end of his CEO mandate in May 2016.
French daily Les Echos reported on Thursday that the company's board is considering whether to accelerate the succession plan for Mestrallet by finding a new leadership structure next year.
The paper said the board had hired a headhunter to look for a successor and that one possible option would be to separate the CEO and chairman function, making Mestrallet chairman of the board, which would give him the time to look for a new chief executive.
A GDF Suez spokeswoman declined to comment on the report.
The paper said Mestrallet had floated the idea to appoint Chief Financial Officer Isabelle Kocher chief executive while he would become chairman, but that this had led to tensions with his number two Jean-François Cirelli, who also eyes the top job.
Mestrallet, Kocher and Cirelli did not discuss the succession issue during Thursday's earnings call.
(Reporting by Geert De Clercq; Editing by Robin Pomeroy)
