French financial services giant BNP Paribas has agreed to take over Benelux bank Fortis in a $19.8 billion deal.
It will now assume control of Fortis operations in Belgium and Luxembourg, taking a 75% stake and a 67% stake in the respective national operations.
The government-backed deal will also see the creation of a “bad bank”, in which Fortis’ toxic assets will be kept.
“This transaction provides BNP Paribas with the opportunity to roll out further its integrated banking model in Europe,” says BNP Paribas. “BNP Paribas will have two new domestic markets.”
The French firm is one of the European banks least effected by the toxic mortgage-backed financial instruments which have done so much to damage the balance sheets of rival firms over recent months.
“It’s a good deal for BNP Paribas,” says Arnaud Scarpaci, fund manager. “The price does not seem excessive.”
D.C.