The boards of Suez and Gaz de France Sunday night agreed the terms of their long-awaited merger to create one of the world’s largest power groups with an estimated market value of €70bn, bringing to an end 18 months of political and financial wrangling.

The deal, first announced by the former French government in February 2006 to fend off a potential foreign hostile takeover of Suez, will create the world’s fourth biggest power group behind Gazprom, EDF and Eon.