Rating agencies are giving mixed reviews to an announcement Monday that Societe Generale of Paris would acquire the Paribas group for $17.5 billion.

The decision to combine the two institutions would strengthen the creditworthiness of Paribas while reducing it at Societe Generale, the rating agencies said.

What's more, "integration of the two large organizations will be a complex process and could involve staff cutbacks abroad," Fitch IBCA said in a release issued Monday.

The combined company, to be known as SG Paribas, would be the No. 2 bank in the world in assets, behind the planned Deutsche Bank-Bankers Trust Corp. combination.

Around half of SG Paribas' work force of 78,000 would be based outside of France.

Both Fitch, a London- and New York-based rating agency, and Standard & Poor's placed Paribas and its retail banking unit, Credit du Nord, on rating alert with positive implications. The two agencies placed Societe Generale on rating alert with negative implications.

"We long felt that Paribas had a problem of size in many foreign markets because it wasn't big enough and couldn't afford to stay the way it was," said Marie-Laure Garnier, a banking analyst with Fitch in Paris.

"Paribas couldn't continue to stand alone and needed to be backed by a major retail bank."

Analysts added that though the planned merger would catapult the combined entity into a leading position in France, it would do little to enhance the two bank's activities elsewhere.

"You're creating a strong French investment bank, but not a new European powerhouse," Leon de Jerez, head of European equities at Standard Life Investments Ltd., told Bloomberg News Service.

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