French utility Gaz de France SA (1020848.FR) intends to use its acquisition of 49.9% of the Leizig municipal utility as a springboard to expand its position in Germany, according to Leipziger Volkszeitung's Friday edition, citing Chief Executive Jean-Francois Cirelli. GdF intends to pay EUR520 million for the stake. Cirelli called the amount a "strategic price." The offer lies about EUR50 million above rival bids, the newspaper said. Cirelli described the investment as a long-term partnership without the intention of achieving a quick return. GdF intends to spend EUR600 million over the next 10 years on storage capacity, the newspaper quoted Cirelli as saying. GdF has been engaged in Germany since 1976, and has invested around EUR2 billion in the German market.
With the merger with Suez (SZEZY) in the first half of 2008, the company will have the financial strength for more expansion, according to the newspaper. Cirelli quantified that financial leeway at around EUR10 billion a year, the newspaper said.