BNP Paribas buys Fortis assets
Monday, 06 Oct 2008 10:51
BNP Paribas buys Fortis assets
BNP Paribas has snapped up Fortis' Belgium and Luxembourg operations for €14.5 billion (£11.2 billion) to make it the eurozone's biggest bank.
The French bank said it was a "unique opportunity" to enter two new domestic markets in Belgium and Luxembourg, to add to France and Italy.
The move will allow BNP Paribas to jump from seventh to the largest deposit bank in the eurozone.
Fortis was rescued by the governments of Belgium, Luxembourg and the Netherlands last week as the bank and insurer seemed in danger of collapse.
BNP Paribas will now run most of the bank's operations, with the exception of those parts acquired by the Dutch government during last week's bailout.
As part of the deal, the Belgian and Luxembourg states will become shareholders of BNP Paribas, with stakes of 11.6 per cent and 1.1 per cent respectively, and Belgium will appoint two new members to join the BNP Paribas board.
Baudouin Prot, chief executive of BNP Paribas, said: "BNP Paribas fully appreciates the extent of the commitment it undertakes towards Belgium, Luxembourg and all Fortis staff and customers."
BNP Paribas added €10.4 billion of most impaired assets within the structured credit portfolio are ring-fenced, limiting the risk for the bank.