BNP Is Dealt a Blow in Its Bid to Create Europe’s Largest Bank
French banking authorities ruled today that hostile bidder Banque Nationale de Paris cannot keep its stake in its target, Societe Generale, effectively ending BNP’s hopes of creating Europe’s largest bank in terms of assets.
“Taking into account the results of the takeover bid offer, BNP “doesn’t hold in a patent manner an effective power of control over Societe Generale,” the Committee of Credit and Investment Institutions said after an 11-hour meeting that began Friday afternoon.
“In these conditions, the committee decided . . . not to authorize BNP to hold a stake representing 31.8% of voting rights in Societe Generale,” the committee said.
A decision allowing BNP to keep its stake would have let BNP move further toward its goal of a three-way merger with Societe Generale and Paribas, which BNP already has acquired.
BNP launched a $37-billion hostile takeover for Societe Generale and Paribas in March. BNP won control of Paribas, but obtained only a minority stake of Societe Generale, leaving the outcome with regulators.
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