NEW YORK, September 2 /PRNewswire/ --     Knight Vinke Asset Management (KVAM) applauds the decision of
President Nicolas Sarkozy to support the spin-off and public listing of Suez'
Environment Division in order to facilitate the negotiation of the merger of
Suez and Gaz de France on terms that could suit the shareholders of both
companies.

The spin-off and public listing of Suez Environment will
create one of the largest publicly listed companies in France and a new
European champion in the water and waste management area, more focused than
its peers and with the potential of playing a leading role in the
consolidation of this industry. This solution, which KVAM publicly advocated
through a series of 13 full page newspaper advertisements in September and
October 2006, will give the Boards and advisers of the two companies
increased flexibility to find mutually acceptable merger terms, whilst taking
into account the constraints imposed by the State's need to maintain
effective control of the resulting entity.

Having said this, we wish to make the following three
observations:

First, we see no benefit to the shareholders of GdF-Suez or to
the shareholders of the independently listed Suez Environment in GdF-Suez
maintaining a 34% shareholding in Suez Environment. For Suez Environment, the
constraint of having a shareholder who wishes to maintain a blocking minority
could hamper its development by limiting its ability to raise additional
equity capital or use its new listing as a currency for acquisitions.
Furthermore, the risk that GdF-Suez' 34% shareholding might some day be sold
on the market may harm Suez Environment's stock market performance because of
stock overhang. For GdF-Suez, the stake brings absolutely no operational
synergies whilst tying up EUR 5 billion in capital that could more wisely be
invested in the Group's core energy business. If the issue is ensuring that
Suez Environment remains under French control, this can be achieved by other
methods which do not uselessly destroy value in this way.

Secondly, GdF has very significant unused borrowing capacity
and, once the Environment Division has been spun off, could acquire Suez for
cash, thereby leaving the French State with a holding of over 70% in
GdF-Suez. If necessary, the State's shareholding could be reduced to 50% (or
slightly less) once the synergies from combining the two companies (which
mainly come from having a more efficient capital structure) start to emerge.
This would result in a very significant profit for the French Treasury.

Thirdly, Suez' shareholders will be expecting true
independence of the financial advisers selected by the Suez Board to provide
fairness opinions as to the terms of the proposed merger. This was made clear
in a letter sent by almost two dozen major institutional shareholders to the
Suez Board (and copied to the Ministry of Finance) late last year.

KVAM is an institutional asset management firm which
specialises in the linkage between value creation and better governance in
large cap public companies. Its clients include some of the world's largest
public pension funds and institutional investors, including, in particular,
CalPERS - the California Public Employees' Retirement System. Since 2004, as
a Suez shareholder, KVAM has played a leading role in promoting public
awareness of the value destruction resulting from Suez' inefficient capital
structure, its minority holdings in non-core businesses and the fact that it
only held 50% in Electrabel, one of its main subsidiaries. On several
occasions, KVAM has publicly advocated change in strategy where this would
result in value creation for all shareholders. During much of 2006 KVAM
actively opposed the terms of the proposed merger between Suez and GdF on the
grounds that these were too favourable to GdF, in its opinion. It
demonstrated that a solution could more easily be found, taking into account
the State's objective of maintaining control of GdF, if Suez' Environment
Division were to be spun off and publicly listed.