UPDATE 1-Engie board proposes Solvay CEO Clamadieu as new board chair

(Adds detail on Clamadieu, Engie board)

PARIS, Feb 13 (Reuters) - The board of Engie will propose Jean-Pierre Clamadieu, the chief executive of Belgian chemical group Solvay, as its new board chairman at a shareholders meeting on May 18, the French gas and power group said in a statement on Tuesday.

Solvay said in a separate statement that Clamadieu, a French national, would remain Solvay CEO as he takes up the non-executive Engie board chairman position, but would start the search for a new CEO with a view to a leadership transition by the end of this year.

Clamadieu’s appointment would be seen as a blow for Engie Chief Executive Isabelle Kocher, 51, who had wanted to combine the CEO and board chair roles after Mestrallet’s retirement.

Kocher was appointed CEO in May 2016 after CEO and board chairman Gerard Mestrallet gave up the chief executive role. She has led a 15 billion euro ($18.4 billion) divestment plan to switch Engie away from fossil fuels and focus on power grids, renewable energy and energy services.

She has said she would be delighted with a new chairman provided he backs her strategy for the group.

Engie said that Mestrallet would be appointed honorary chairman in recognition of the 23 years he devoted to developing the company. Mestrallet built up the global utility through a series of mergers and acquisitions.

It also said that the French state - which in September reduced its stake in Engie’s share capital to 24.1 percent through the sale of a 4.5 percent stake - would give up one of its five seats on the board.

On March 7, 2018, the board will choose a new independent board member whose appointment will be submitted for approval at the shareholders in May.

The French state remains the leading shareholder in Engie. Clamadieu’s appointment was secured on Monday after a source close to the French finance ministry said the government would back him for the chairman post.

Clamadieu, 59, is familiar with doing business in Belgium, a boon to Engie which owns Belgium’s power market leader Electrabel and operates the country’s two nuclear power plants.

Reporting by Geert De Clercq; editing by Richard Lough