French energy group GDF Suez was on Tuesday set to sign an alliance with Chinese sovereign wealth fund CIC, sources close to the deal said.
China Investment Corporation was expected to take a 30 percent stake in the French company's exploration and production arm in an agreement reportedly worth between two and three billion euros ($3-4 billion).The companies were set to sign the deal Tuesday before making an official announcement on Wednesday when GDF Suez publishes its half-year results.The agreement stipulates that Chinese funds may be used in GDF Suez investments across the Asia-Pacific region except China, the CIC not being permitted to invest in its own country, the French financial daily Les Echos reported Monday.GDF Suez said it did not wish to comment. Spokesman Jerome Chambin said only that Asia-Pacific was "a major development zone for the group.""It's quite clear that the Chinese want access to energy resources given their huge need ... While GDF wants access to the Chinese market," said Colette Lewiner, energy director at consulting firm Cap Gemini.China, which mainly relies on coal energy, is beginning to turn towards gas and GDF Suez, whose production is currently anchored in the North Sea and the Maghreb, has major projects in Asia-Pacific and Australia and Indonesia in particular.CIC was established in 2007 to invest some of China's huge foreign exchange reserves on the global financial markets.China has the world's largest foreign exchange reserves, standing at $2.8 trillion (2 trillion euros) at the end of 2010.The CGT labour union has condemned the alliance as the "carving up" of the historic Gaz de France company.Despite a commitment "to preserve an integrated group," the union said, "the carving up of a historic business to finance the international development of GDF Suez is continuing."