The troubled banking and insurance group Fortis confirmed on Monday that French banking giant BNP Paribas will buy all of Fortis' insurance operations in Belgium and a 75-percent stake in Fortis' banking activities in Belgium.
The Belgian government, which has purchased 100 per cent of Fortis' Belgian activities, has reached an agreement with BNP Paribas on the subsequent transfer of 75 percent of the Fortis banking activities in Belgium, Fortis said in a statement.
BNP Paribas will acquire 100 percent of Fortis' insurance activities in Belgium for 5.73 billion euros in cash (7.85 billion U.S. dollars), subject to final closing adjustment, Fortis said.
A portfolio of structured products with fair value of 10.4 billion euros (14.2 billion dollars) is transferred by Fortis' Belgian banking division to a separately managed entity jointly owned by the Fortis Group, the Belgian state and BNP Paribas, the financial services group said.
The Fortis board of directors has approved these transactions Sunday night, the statement said.
"As a result of this transaction, the Fortis Group is exiting the banking business and the Belgian insurance business," Fortis CEO Filip Dierckx said in the statement.
"Given the extremely difficult market environment, the integration of Fortis Bank and Fortis Insurance Belgium into a truly leading European financial company is in the best interest of all stakeholders," he said.
Meanwhile, Radio Netherlands reported that BNP Paribas will also take a 67 percent stake in Forti's operations in Luxembourg. The Luxembourg government is to hold a minority of stake in Forti's operations in the country.
The BNP Paribas takeover deal was made possible by swapping shares and issuing new shares. As a result the Belgian government will hold about 10 percent interest in the French bank and Luxembourg government is to hold less than two percent in BNP Parisbas.
The latest takeover move followed the Dutch government's announcement on Friday that it has bought 100 percent of the Dutch branch of Fortis.
To prevent Fortis from insolvency, the Belgian, Dutch and Luxembourg governments bought an interest of just under 50 percent in Fortis' operations in each of the countries last week. But the bailout appeared to have failed to allay widespread worries about the group's solvency and Fortis stock continued to fall.
After talks over the weekend between the Belgian government and banking businesses concerned, the Belgian government has acquired the remaining share -- 50 percent plus one share -- of Fortis' banking activities in Belgium for 4.7 billion euros (6.5 billion dollars) in cash, Fortis said.
Source: Xinhua
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