In Brief: Merger Hopes Boost French Banks' Stock

Shares in Banque Nationale de Paris, Societe Generale, and Paribas all rose Tuesday on the expectation that the French central bank will letallow BNP to retain its 31.5% stake in Societe Generale, paving the way to create a $1.1 trillion asset bank.

French regulators have so far failed to indicate when they plan to take a decision, but are reported in press accounts to favor a merger of the three banks.

Societe Generale last February launched a friendly $17 billion bid for Paribas. In March, BNP launched a $38 billion hostile bid for both Societe Generale and Paribas, gaining 65% control over Paribas but slightly less than the 33% stake in Societe Generale it needs to make the three-way deal.

Societe Generale chairman Daniel Bouton has consistently ruled out any compromise with BNP, prompting speculation that the government will force Societe Generale into an alliance with BNP. -- James R. Kraus

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