Puneet Varma

Engie

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Type  Société Anonyme
Industry  Electric utility
Revenue  69.9 billion EUR (2015)
Traded as  Euronext: ENGI
Predecessor  Gaz de France Suez
Headquarters  La Défense, France
Engie wwwunderconsiderationcombrandnewarchivesengie
Founded  July 22, 2008; 8 years ago (2008-07-22)
Key people  Isabelle Kocher (CEO) Gérard Mestrallet (Chairman)
Stock price  ENGI (EPA) € 12.56 -0.16 (-1.26%)10 Mar, 5:36 PM GMT+1 - Disclaimer
CEO  Isabelle Kocher (3 May 2016–)
Subsidiaries  Cofely AG, Electrabel, Suez Environnement
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Engie (known as GDF Suez prior to April 2015) is a French multinational electric utility company, headquartered in La Défense, Courbevoie, which operates in the fields of electricity generation and distribution, natural gas, nuclear and renewable energy. The company is a component of the Euro Stoxx 50 stock market index.

Contents

Engie is a pioneer in nuclear energy in Europe with the development of the first pressurised water reactor built in Belgium. 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. As a nuclear operator, ENGIE owns and operates seven reactors in Belgium through Electrabel, owns stakes in the Chooz and Tricastin plants in France (1,208 MW – the equivalent of one nuclear reactor) and has drawing rights in Germany.

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. Since the merger in 2008, the French state holds approximately a third of the company. It adopted the "Engie" name in April 2015 in order to emphasize the changing nature of its energy business and de-emphasize its historical role as a nationalized gas monopoly.

The company holds a 35% stake in Suez Environnement, the water treatment and waste management company spun off from Suez at the time of the merger. GDF Suez bought 70% of Britain's International Power in August 2010, creating the world's largest independent utility company. The purchase of the remaining 30% was announced by GDF Suez in April 2012, and the transaction completed in July 2012. On July 1, 2015, the company announced the acquisition of solar parks developer Solairedirect, which makes it the largest solar power electricity producer in France.

As of 2015, Engie employs 154,950 people worldwide with revenues of €69.9 billion. Engie is listed on the Euronext exchanges in Paris and Brussels and is a constituent of the CAC 40 and BEL20 indices.

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, with a heritage tracing two .

Suez was (and still remains, through GDF Suez as) 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 Lyonnaise des Eaux.

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 will retain International Power's listing on the London Stock Exchange and be 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 20GW installed generating capacity, with 5GW 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 aqquire Lend Lease FM in 2014 from Lend Lease Group giving the new business a substantial platform in the operation of PFI assets in the UK.

GDF Suez becomes Engie: 2015 - present

On April 24, 2015, GDF Suez announced it has changed 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.

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

On 2nd March 2017, Engie acquired Keepmoat Regeneration for £330m.

Key Figures

  • 154,950 employees in close to 70 countries:
  • 57,750 in electricity and gas
  • 97,200 in services.
  • €69,883 billion in 2015 revenues.
  • €22 billion in investments per year over 2016-2018.
  • 1,000 researchers and experts at 11 research and development centers.
  • As of May 2015 ranked 2nd in the Forbes 2000 ranking of largest companies among electric utilities.
  • Ranked #1 most valuable brand by Brand Finance among utilities.
  • In October 2009 ranked 6th in an A.T. Kearney/BusinessWeek study of the world's best companies.
  • France

    Thanks to former Suez subsidiaries such as Compagnie Nationale du Rhône (CNR), Electrabel and Société Hydro Electrique du Midi (SHEM), GDF Suez is the second-largest generator of electricity in France behind EDF. The company indicated in December 2011 that ¾ 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 La Compagnie du Vent (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. With the stated aim of reaching a total production capacity of 10 GW by 2013, three gas-fired thermal power plants at Fos-sur-Mer, Montoir-de-Bretagne and Saint-Brieuc are currently in various stages of development, as is a solar panel project in Curbans.

    International

    The GDF Suez group also generates electricity in a number of countries outside France. Most notably, the company is the leading producer in both Belgium and the Netherlands through Electrabel (and the fifth-largest generator in Europe overall), as well as the largest non-state owned generator in both Brazil and Thailand (thanks to majority stakes in ENGIE Brasil and Glow Energy respectively). GDF Suez also holds a 50% stake in NuGeneration (NuGen), a company planning to build a new nuclear power station of up to 3.6 GW capacity at Sellafield in the United Kingdom. The other 50% of NuGen is held by Iberdrola. The company also operates in North and Latin America through its Suez Energy International unit, as well as in other European and Asian countries. The company generates electricity through various types of plants, including thermal power, nuclear power, combined heat and power, wind farms, hydroelectric and biomass. Engie is currently developing a $15.8 billion nuclear power plant in Sinop, Turkey in partnership with Itochu and Mitsubishi Heavy Industries.

    In November 2016, Engie signed an agreement with Moroccan energy company Nareva. The two companies are planning to develop energy assets in North and Western Africa that will produce 5,000 and 6,000 megawatts. The plans will take place between 2020 and 2025.

    Carbon intensity
    Coal-fired power plants

    In October 2015, Engie announced that it will no longer build coal-fired power plants. Gérard Mestrallet said projects for which Engie had already entered into firm commitments would be honored, but projects where contracts had not yet been signed will de facto be suspended. As a result, Engie abandoned two coal-fired power plants projects in Ada Yumurtalik (Turkey) and in Thabametsi (South Africa). In February 2016, Engie announced the selling of its stakes in the Paiton power plant located in Indonesia and in the Meenakshi power plant located in India. Engie also announced the closing of the Rugeley power station in England.

    In May 2016 Engie CEO Isabelle Kocher told a French Senate committee that it was planning a gradual withdrawal from coal-fired generation over the coming years. This could include closure of, or sale of its stake in, the lignite-fired Hazelwood power station in Victoria, Australia.

    Natural gas

    Engie covers the whole gas chain, from exploration and production to distribution. It is the:

  • second largest gas transportation network in Europe
  • largest gas distribution network in Europe
  • fifth largest LNG portfolio in the world
  • largest LNG importer in Europe
  • second largest LNG terminal operator in Europe.
  • Energy services

    Engie provides energy efficiency and environmental services. 90,000 of the group's employees are dedicated to services.

  • Engineering: consulting, feasibility studies, engineering, project management and client support
  • Systems, installations and maintenance: electrical installations, industrial maintenance, air conditioning and refrigeration, and systems integration
  • Energetic services: energy efficiency solutions, multi-technology maintenance management, cogeneration and facilities management
  • Housing services: cost-effective energy solutions, energy performance improvements, renewable energy and thermal renovation
  • "Smart city": urban heating and cooling community systems, development of high-end technology solutions, a streamlined energy mix, carbon footprint reduction of buildings
  • Shareholder structure

    As of 31 December 2015
    1. State of France (32.55%)
    2. Groupe Bruxelles Lambert (2.33%)
    3. Caisse des dépôts et consignations (1.88%)
    4. CNP Assurances (1.77%)
    5. Sofina (0.37%)
    6. employees of the company (2.72%)
    7. free float (56.55%)
    8. treasury stock (1.62%)

    Business units

    Since 2016, Engie is organised in 24 business units:

  • 11 are geographic: Africa, Latin America, Northern America, Asia Pacific, Benelux, Brazil, China, Northern, Southern and Eastern Europe, "Génération Europe" (Belgium, France, Germany, Italy, Luxembourg, Netherlands, Poland, Portugal, Spain, United Kingdom), Middle East, Southern, Central Asia and Turkey, United Kingdom.
  • 8 are set up in France: "France BtoB", "France BtoC", "France Renewable Energy", "France Networks", "Natural Gas Transport" (GRTgaz), "Natural Gas Distribution" (GRDF), Liquefied Natural Gas (LNG) terminals (Elengy), Natural Gas Storage (Storengy).
  • 5 are global: "Exploration and Production International", Global LNG (Liquefied Natural Gas), Global Energy Management, Tractebel Engineering, GTT (GazTransport & Technigaz).
  • Subsidiaries and holdings

  • Altiservice Engie
  • Engie Axima
  • Engie Cofely
  • Engie Ecova
  • Engie Electrabel
  • Engie Endel
  • Engie Fabricom
  • Engie Global Markets
  • Engie Home Services
  • Engie IT (Information & Technologies)
  • Engie Lab
  • Engie MtoM
  • Engie Réseaux
  • Solairedirect
  • Tractebel Engie
  • Management

    The Engie General Management:

  • Isabelle Kocher, Chief Executive Officer
  • Gérard Mestrallet, Chairman
  • Engie is administered by a Board of Directors of 19 members. The Board is backed by the recommendations of four specialized committees.

    The members of the group executive committee are:

  • Isabelle Kocher
  • Paulo Almirante
  • Pierre Chareyre
  • Pierre Deheunynck
  • Henri Ducré
  • Judith Hartmann
  • Didier Holleaux
  • Sandra Lagumina
  • Yves Le Gélard
  • Thierry Lepercq,
  • Pierre Mongin
  • Jérôme Tolot
  • As from 1 October 2016 they will be joined by Ana Busto who has been newly appointed as Senior Vice President, Brand and Communications of the Engie Group, reporting to Chief Executive Officer Isabelle Kocher.

    References

    Engie Wikipedia


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