Suez was a French multinational corporation that merged with Gaz de France in 2008 to create GDF Suez, while its waste and water components became Suez Environnement. The merger was controversial due to the French government’s stake in Gaz de France, and Suez has faced criticism for its water privatization practices.
Suez was a French-based multinational corporation that operated water, waste management, energy and, for a short time, telecommunications projects around the world. In 2008, it merged with French company Gaz de France to create GDF Suez, a service company. The waste treatment and water components of the former company were transformed into a new multinational called Suez Environnement.
History of the corporation
The long and complex history of this company began in the Netherlands in 1822 and included mergers and breakups with several companies. The name Suez comes from its involvement in the construction of the Suez Canal in the mid-1800s. After joining the company in 1984 as a vice president, Gérard Mestrallet became president and chief executive officer (CEO) in 2001. He held this position when the merger with Gaz de France took place, then he became CEO of Suez Environnement.
Controversial merger
There was considerable controversy in France over the merger of these two companies, because the state previously had a government stake owned by Gaz de France. When the plan was first announced in February 2006, French Prime Minister Dominique de Villepin and President Nicolas Sarkozy were against the merger, with Villepin backing it and Sarkozy promoting a deal that would allow France to retain its controlling stake. While Villepin and Sarkozy reached an agreement to push the deal forward, the Left Opposition across the country continued to raise objections to the privatization of Gaz de France due to fears of a price hike. The plans proceeded despite the criticism, however, and French laws and Gaz de France shares were restructured to allow for the deal. On 22 July 2008, the two companies officially merged to form GDF Suez, which became the second largest utility company in the world.
The former company’s water and waste divisions became Suez Environnement, of which GDF Suez owns a substantial share. These divisions began with La Société Lyonnaise des Eaux et de l’Eclairage, which managed the water supply in Cannes, France beginning in 1880. Operations evolved to include water catchment, treatment and distribution of drinking water; industrial water purification; and the collection, treatment, recycling, energy recovery, incineration and landfilling of waste. Suez Environnement has several subsidiaries, including United Water, Ondeo, Degrémont, Sita and Safege.
Respond to critics
As one of the largest water companies in the world, Suez has come under fire from critics of water privatization worldwide. The company has suffered numerous public relations injuries from water privatization unrest, most notably a corruption scandal in Grenoble, France; the loss of the contract with Atlanta, Georgia, in the United States; and contract renegotiations in the Philippines. Anti-privatization activists and non-governmental organizations such as Food and Water Watch said the company exploited the poor, overbilled its customers and failed to meet some of its contractual obligations. Suez claims it has upheld its contracts, improves the accessibility and quality of water resources in its contracted areas and has far more success than failure with its water contracts.
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