Luxembourg’s Economics Minister Jeannot Krecke said Friday that the path was clear for the merger of three companies to form a national energy provider.

Under the plan, electricity company Cegedel would merge with gas and electricity provider Soteg and Saar Ferngas, Krecke said. Ownership of the new entity would be split between the state, steel company ArcelorMittal and energy companies RWE Energy and E.ON Ruhrgas.

The government has pushed the creation of the unified company as a way to strengthen its energy infrastructure. Officials have said that only energy companies of a certain size will be able to compete should Europe’s energy markets become liberalized.

The new company is expected to have 700 employees and annual sales of more than 2 billion euros (2.6 billion dollars).