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BNP Paribas takes stake in Fortis
Causes:
Since January, share values op Fortis, once of Europe’s largest financial companies, have plummeted some 70%.
Then, Europe is “in financial crisis”.
Last year, Fortis was laid low in part by its ill-timed acquisition of the Dutch banking operation of ABN Armo as part of the largest take over in banking history.
Conséquences:
The large French financial institutions is getting a majority stake in the troubled Belgian bank.
Belgian government announced that French banking giant BNP Paribas will take 75% stake in remaining operations of troubled bank Fortis NV.
Y. Leterme, the prime minister, told “No client or deposition (at Fortis) will end up in problems due to the financial crisis.
It was important for another bank to take over troubled Fortis to restore confidence in the Company.
Explications:
The Minority stakes in MNP would give the governments the power to ensure the French bank does not move to cut jobs at Fortis.
Media has reported that it was unclear whether trading in Fortis would continue as usual.