Nov. 9 (Bloomberg) -- GDF Suez SA, the world’s second- largest utility, and Codelco agreed to merge their electricity generation and gas distribution assets in Chile, creating the biggest power producer in the north of the country.

GDF Suez will have a 52.4 percent stake in joint venture Edelnor, while Codelco will hold 40 percent and the remaining 7.6 percent will be traded on the stock market, GDF Suez said today in an e-mailed statement.

The move is designed to simplify the network of companies and assets controlled by GDF Suez and Codelco, which are already partners in northern Chile’s electricity grid. Edelnor will hold an installed capacity of 1,795 megawatts, increasing to 2,125 megawatts with the commissioning of new power stations by 2011.

“The merger will strengthen both the company and the system,” Dirk Beeuwsaert, GDF Suez’s executive vice president for Energy Europe & International, said in the statement. Investment will focus on thermal projects using clean technology and renewable energy, he said.

Under the merger, existing businesses becoming subsidiaries of Edelnor include Electroandina, Gasoducto Nor Andino in Chile and Argentina, the new CTA and CTH thermal power stations and Edelnor’s own operations.

To contact the reporters on this story: Guy Collins in London at guycollins@bloomberg.net; David Whitehouse in Paris at dwhitehouse1@bloomberg.net

Last Updated: November 9, 2009 03:49 EST