PARIS -(Dow Jones)- Franco-Belgian utility Suez and French State-controlled gas company Gaz de France on Monday said their boards have approved their long-awaited merger to create a major natural gas and energy supplier called GDF Suez.

The French State will hold a 35% stake in the new entity, which will have a combined stock market capitalisation of €90bn ($123bn) and revenue of €72bn. However, the deal involves the partial spin-off of Suez's environment activities.