France's Banque Nationale de Paris on Tuesday launched an unsolicited $37 billion bid for rival banks Societe Generale and Banque Paribas, a move that would create the world's largest bank.
The offer for the two banks - which unveiled their own merger pact last month - signals a dramatic shift in takeover tactics in Europe. It marks the first major hostile bid by one European bank for another.
If BNP's bid is successful, it would create a banking colossus with $1.078 trillion of assets. A bank of that size would tower over the proposed combination of Deutsche Bank and Bankers Trust Corp., with $713 billion of assets, and Bank of Tokyo Mitsubishi, with $692 billion.
Senior sources at BNP confirmed the bid, which was first disclosed by the Conseil des Marches Financiers, France's stock-exchange regulator.
According to the reports, BNP is offering 15 of its shares for seven Societe Generale shares and 11 of its shares for eight Paribas shares.
Societe Generale and Paribas agreed to merge in a deal valued at $18 billion in which Societe Generale offered five of its shares for every eight Paribas shares to create SGParibas.
All three banks are profitable and have significant operations in the United States. BNP also owns San Francisco-based Bank of the West.
BNP was earlier widely viewed as a prime contender for control of Credit Lyonnais, which is slated to be privatized by the French government.
However, sources said that BNP had become increasingly unwilling to go along with a government sponsored plan under which it would progressively increase its stake in Credit Lyonnais from a minority to majority holding.