A retrospective evaluation of the GDF/Suez merger: Effects on the Belgian gas hub

We present an ex-post analysis of the effects of GDF’s acquisition of Suez in 2006, which created one of the world’s largest energy companies. We perform a series of econometric analyses on the market for trading at the Zeebrugge gas hub in Belgium. Removing barriers to entry and facilitating access to the hub through ownership unbundling were an important part of the objectives of the remedies imposed by the European Commission. Our analyses show a robust price decline after the merger. Additional evidence on traded volumes and number of hub participants is in line with an increased liquidity at the hub after the merger. This suggests the remedies were effective in limiting the potential anti-competitive effects of the merger. Moreover, it suggests that ownership unbundling has generated improved access to the hub. Therefore, remedies may have done more than simply mitigate the potential anti-competitive effects of the merger; they may have effectively created competition.