Fury at sale of French gas company

PARIS - Gaz de France, the state-owned gas company, will go ahead with an initial public offering today, prompting labour unions to call for strikes to protest against the sale.

The Government plans to raise as much as 2.5 billion ($4.25 billion) selling the shares, Finance Minister Thierry Breton said on June 9. Gaz de France will also sell as much as 1.5 billion of new shares to finance expansion, he said.

That would make it Europe's biggest IPO since Belgium's dominant phone company Belgacom SA raised $6.15 billion in March 2004.

The sale is going ahead even after voters rejected the European constitution amid mounting concern about unemployment and the end of protected markets. It's a trial run for the planned IPO of Electricite de France, Europe's largest power company, whose employees threatened to turn out the lights in Paris last year when a law was passed to prepare the sale.

Jerome Forneris at Banque Martin Maurel in Marseille said the sale of the once heavily unionised Gaz was a test to "the unions to see whether it could sell EDF too".

Confederation Generale du Travail, the biggest union at the utilities, has called on France to scrap both sales. Olivier Barrault, a Gaz de France board member representing the CGT union, has said the sale should be delayed.

About 9.5 per cent of the company's workers took part in a strike on June 20 to protest against the sale, said Beatrice de Boer, a Gaz de France spokeswoman. They had no impact on business, she said. The company has 38,000 employees.

- BLOOMBERG