Consultancy sees failure of GDF/Suez merger -paper

PARIS, May 17 (Reuters) - A report by French consultancy Secafi Alpha has predicted that a planned merger between utilities Gaz de France GAZ.PA and Suez (LYOE.PA: Quote, Profile, Research, Stock Buzz) will be a failure, Le Parisien newspaper reported on Saturday.

Le Parisien said the consultancy's report highlighted that the enlarged GDF/Suez group would still be at a competitive disadvantage to France's main electricity provider Electricite de France (EDF.PA: Quote, Profile, Research, Stock Buzz).

It added that high oil prices and strictly regulated French electricity prices could also hinder a merged GDF/Suez company, which would be worth about 100 billion euros ($154.8 billion) at latest stock market prices.

"Recent changes in the price of oil are not favourable to the business goals of the company in France," said the Secafi Alpha report, according to Le Parisien.

"In our eyes, the level of electricity prices administered in France remains a key factor behind the weakness of the GDF/Suez business plan," added the report.

Officials at Secafi Alpha, which advises company works councils on legal matters, could not be immediately reached for comment.

Officials at GDF and Suez could not be reached for comment.

The long-running planned merger between GDF and Suez is due to be completed this summer.

The French right-wing government engineered the merger in 2006 to fend off the threat of a possible bid for Suez by Italian utility Enel (ENEI.MI: Quote, Profile, Research, Stock Buzz).  Continued...