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BNP Paribas Agrees New Fortis Acquisition Terms
Rachel Walsh
10 March 2009
French bank BNP Paribas has agreed to new terms on a deal to purchase Fortis' bank operations in
In a statement, the bank said it is still looking to acquire 75 per cent of Fortis' Belgian and Luxembourgian banking operations and, in exchange, would provide Fortis with an 11.4 per cent stake in BNP Paribas. However, under the new agreement, BNP Paribas will now look to purchase 25 per cent of Fortis' insurance business, up from 10 per cent previously, for €1.38 billion. Furthermore, BNP Paribas will pay €200 million ($252 million) into a shell company to hold Fortis' risky assets and bad loans. For its part, Fortis will pay €760 million to the company, while the Belgian government is to contribute €740 million, as well as guarantee up to €1.5 billion on losses of more than €3.5 billion on current Fortis loans. At what was then the height of the merger and acquisition boom, Fortis, along with Spain’s Santander and Royal Bank of Scotland in the UK, bought Dutch banking group ABN Amro in 2007, with Fortis acquiring the private banking business. Feeling the effects of the financial crisis, Fortis sold off the operation last year.