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    BNP Paribas pays $20.1 bln, takes over Fortis in Belgium, Luxembourg

    HotNewsTurkey with wires
    06.10.2008 - 09:40 | Son Güncelleme:

    BNP Paribas, France's biggest listed bank, said on Monday it was paying 14.5 billion euros ($20.1 billion) to take control of European financial group Fortis and boost its European market share.

    BNP Paribas will buy control of Fortis's banking businesses in Belgium and Luxembourg for 9 billion euros, funded through the issuance of 132.6 million new BNP Paribas shares.

     

    As part of the deal, BNP Paribas would acquire 1,458 branches located in Belgium, Luxembourg, and all other countries except the Netherlands including Poland, Turkey and France and the Fintro branch network in Belgium.

     

    The French bank will also buy Fortis Insurance Belgium for 5.5 billion euros in cash, it said in a statement.

     

    It added that the takeover would boost earnings from the first year and would improve its capital ratios, enabling BNP Paribas to become the euro zone's largest deposit bank.

     

    The deal, thrashed out over a weekend of intense talks, leaves the Belgian and Luxembourg governments with reduced holdings in Fortis, which they partly nationalized a week earlier, in exchange for part of BNP Paribas, which becomes the biggest bank in Europe in terms of deposits.

     

    The transaction would also see 10.4 billion euros worth of Fortis's most impaired assets within the structured credit portfolio ring-fenced.

     

    BNP Paribas shares closed up 9.4 percent at 71.35 euros on Friday, giving the bank a market capitalization of around 65 billion euros.

     

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