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. Last Updated: 07/27/2016

Suez, Gaz de France Seek Deal on Merger

PARIS -- Executives at Suez and Gaz de France are holding weekend talks to try to seek a deal on a 90 billion euro ($123 billion) merger, with both utilities expected to hold board meetings Sunday.

Trade unions, who are opposed to the deal, say they have had indications that the final details are being discussed -- the FO union has said state-controlled GDF's board was due to meet in the evening and that Suez's board would also meet Sunday.

GDF and Suez declined to comment, and French President Nicolas Sarkozy's office has also declined to comment on the merger talks.

The unions said details seeping out over the weekend suggested, however, that the endgame was in sight for the deal, which was brokered by the previous conservative government in early 2006 to fend off a feared takeover bid for Suez by Italy's Enel.

A FO union official said Saturday that the plan was for the merged group to focus on the energy businesses, which analysts have said was one way to solve a financial impasse that has cropped up since the merger plans were unveiled.

Suez's market capitalization has increased faster than that of GDF since then, preventing it from being the merger of equals, as was initially envisioned. Analysts have said that for the deal to remain a merger of equals, Suez must shed assets and distribute the receipts of such sales to its shareholders through a special dividend.

And Suez has, sources close to the situation say, bowed to pressure from Sarkozy to split its business and shed part of its historic water assets to salvage the deal.