Byline: Chris Blackhurst City Editor
THE boss of the largest utility company on the planet is sitting opposite me. He's jolly, smiles a lot, French. We're sitting in the Radisson Hotel at Canary Wharf. After he sees me, Gerard Mestrallet will journey to Stratford to the Olympic Park, where he will attend the unveiling of the new, super-green [euro]90 million ([pounds sterling]79 million) Energy Centre that will service the 2012 Games and beyond, all paid for by his behemoth of a company, GDF Suez.
The first company to sponsor the London Olympics, via its UK arm, was EDF, GDF's archrival. Also French.
Two flag-wavers for London 2012, two global energy giants, both French. To rub it in, GDF just agreed last week to inject some of its foreign assets into International Power, the British firm. In the deal, GDF becomes a 70%-owner of the new International Power, making Mestrallet's operation the world's biggest, with annual turnover of $115 billion ([pounds sterling]73.2 billion).
I cast my mind back, to the privatisations of the Eighties. Mrs Thatcher and her colleagues broke up our gas and electricity providers into lots of pieces. Gradually, many have been absorbed by larger foreign players. So today, we don't have a truly major international energy player. And even our Olympics depend on French firms for some of their support.
"For the consumer, the UK system has not been so bad," claims Mestrallet, in perfect but heavily French-accented English. "There's been a completely open market where there is competition."
Behind his spectacles, his eyes twinkle and his lips form a grin. "But it's true, most of the UK companies have been merged with foreign ones."
Mestrallet has charm and dry wit in abundance. The middle of three brothers who all went into business, he originally trained as an aeronautical engineer, before attending France's elite executive schools and joining what was Compagnie de Suez in 1984, helping to manage special projects. Eleven years later he was its chairman and chief executive. Since then, he says, "We've made six mergers: Lyonnaise des Eaux, three cross-border including a very big Belgian company, Gaz de France two years ago and International Power this year. Now we're the world's largest utility. Starting from our original business model we have spread and now we've reached critical size." So no more takeovers then? "I never said that," he replies laughing.
The heart of the Brit across the table sinks lower. You can forget your North-West this and Southern that. Somebody somewhere -- probably among the legion of highly paid advisers and supposed visionaries that Mrs T employed -- seriously screwed up.
For all his laidback persona, Mestrallet is calculating and deliberate. Combining with Gaz de France took him the best part of seven years to achieve and required the privatisation of Gaz de France which had been nationalised since 1945. The French government asked to have a 35% stake in the combined group.
Mestrallet, who was working on them with his dream of a French world-beating energy giant, readily agreed. "You know, it wasn't the government's idea to create an international energy champion.
It was my idea. But the [French] government accepted it." EDF is also part-owned by the French state.
To be fair, Mestrallet had been adviser to Jacques Delors but even so, would our lot at Westminster have agreed to such a deal? Would the UK government have kept a strategic hold? We had our "champions" too once, remember? British Telecom, British Airways, BP, British Gas, British Aerospace... None of them is now the world's best in class.
It's doubtful whether our City, too, would have tolerated the softly-softly approach of Mestrallet. That, plus the presence of the Government as a major shareholder would have been a significant turn-off.
The International Power marriage took two years of persuasion, talking and selling to investors. …