weighs alliance with rival BNP, says report
8 June 2007
French bank Societe Generale has proposed an alliance with bigger domestic rival
BNP Paribas, in a deal that could create a national banking leader in France,
a local newspaper reported.
Bouton, head of SocGen, had asked two investment banks to advise on a tie-up with
BNP that could create a combined entity dominating the market in France by market
value and standing third in Europe as a whole, Les Echos said
a deal could shield SocGen from any unsolicited takeover bid by other European
suitors, it would affect thousands of jobs due to the overlapping branch networks
of the two lenders, making it politically controversial.
would also speed up consolidation in Europe's banking industry.
move comes just weeks after Italy's UniCredit moved to merge with domestic rival
Capitalia and Dutch ABN AMRO agreed a deal with Barclays inviting a rival offer
by a consortium of Royal Bank of Scotland, Fortis and Santander.
Societe Generale spokesperson refused to comment on "rumours", adding
a major operation was "neither necessary nor urgent" for the bank.
had made a failed takeover attempt on SocGen in 1999, after which it managed to
chief executive Baudouin Prot also last month said his bank was not interested
in a deal with Societe Generale, telling shareholders such a link would carry
"huge execution risks".
is larger than SocGen with a market capitalisation of around 80
billion euros compared with SocGen's 64 billion.
the moment, HSBC is the biggest European bank by market value, followed by Royal
Bank of Scotland and Banco Santander. BNP is number 4 and SocGen ranks 9 by market
capitaliaation, and the combination would be third.
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