Suez CEO rules out B.Energy bid before GDF merger

By Marie Maitre and Benjamin Mallet

PARIS (Reuters) - Suez (LYOE.PA) Chief Executive Gerard Mestrallet on Friday ruled the French utility out of the bid race for British Energy BGY.L ahead of its own merger with Gaz de France GAZ.PA.

Utilities across Europe are stalking British Energy, the UK's only private nuclear generator which is 35 percent owned by the government, to take advantage of the country's plans to expand its use of nuclear power.

At a news briefing, Mestrallet said Suez's decision to invest in nuclear projects in Britain depended on the future status of British Energy.

"Between now and the merger, we will not take part in big alliances as we are building one with Gaz de France," he said.

"Initially, British Energy seemed to want to have a number of partners to build nuclear plants, so we could have worked with them in partnerships along with other utilities such as E.ON EONG.DE or Electricite de France (EDF.PA).

"Now, if there are different scenarios that could go as far as a full takeover of British Energy then it is clear that, because this would take place between now and our merger (with Gaz de France), this is not for us."

Pressed to clarify whether a merged GDF Suez would bid for British Energy, he said: "By definition, there will be a new board meeting after the merger, and it will be up to this new board to define key elements of group strategy."

A source close to the matter said on Friday EDF may join an 11 billion pound bid battle for British Energy.