BNP Paribas pays 14.5 bn euros for troubled Fortis

October 6th, 2008 - 4:19 pm ICT by IANS  

Paris, Oct 6 (DPA) French bank BNP Paribas will pay 14.5 billion euros ($19.7 billion) to take over the majority of the troubled insurance and banking giant Fortis in Belgium and Luxembourg, BNP Paribas said Monday.The deal, which involves 9 billion euros worth of shares and 5.5 billion euros in cash, includes the purchase of 75 percent of Fortis from the Belgian government and 16 percent of Fortis from Luxembourg, which raises BNP’s stake in the Luxembourg segment of Fortis to 67 percent.

As part of the deal, the Belgian government first purchased 100 percent of Fortis’s Belgian activities. As a result, Brussels will retain an 11.6 percent stake in BNP Paribas.

In addition, the Dutch government acquired all of Fortis’s insurance and banking business in the Netherlands.

By taking over 239 billion euros worth of deposits in Belgium and Luxembourg, BNP Paribas becomes the leading bank in the two countries and the largest savings deposit bank in the euro zone.

On Sep 28, in a desperate move to save the bank, the governments of the Netherlands, Belgium and Luxembourg had partially nationalised Fortis by purchasing 49 percent of its businesses in their respective countries, supplying the bank a total of 11.2 billion euros to help keep it afloat.

The bail-out provided the bank with the funding it had desperately needed since its joint takeover, along with the Royal Bank of Scotland and Spain’s Banco Santander, of ABN Amro in October 2007.

In June 2008, Fortis had publicly announced its need for substantial extra funding.

Tags: , , , , , , , , ,

Posted in Business |

Subscribe