defended France's largest investment bank from a $13 billion hostile takeover by Banque Nationale de Paris, has resigned, Paribas announced Wednesday.
BNP chairman Michel Pebereau is to succeed Mr. Levy-Lang, who joined Paribas 25 years ago and became chief executive officer in 1990 when the bank was mired in a real estate slump that led to the near-collapse of Credit Lyonnais. The latter at the time was France's largest publicly traded bank.
Mr. Levy-Lang, 61, took over Paribas when it was unprofitable, but last year it had net income of $1.051 billion. However, Axa SA, Paribas' main shareholder and the world's largest insurer, was unhappy because the stock price had fallen 14% from mid-1990 through yearend 1998.
"As a manager he was remarkable, but Paribas' strategy of building an independent investment bank was never accepted by the market," said Marc Renaud, who manages $200 million at CCR Actions. "Perhaps the moral of the story is that in France, you never win against Axa."
BNP won 65.06% of Paribas shares in a six-month battle during which Mr. Levy-Lang fought Mr. Pebereau's plan to buy both Paribas and Societe Generale, creating the world's largest bank in terms of assets. Axa chairman Claude Bebear favored the BNP plan over an earlier agreement by SocGen and Paribas to merge.
Mr. Levy-Lang's resignation was not a surprise. During the takeover battle he insisted that a merger with BNP would not be as good for Paribas shareholders as a marriage with SocGen. "The fundamentals aren't favorable, there would be large execution risks, and we don't even know what project would finally be put in place," he told the French business daily Les Echos.
The French market regulator is to rule Friday on whether BNP can keep its 37.15% of SocGen, which would pave the way for a merger of the three companies, or must give it back to the former shareholders.
Born in 1937 in Alexandria, Egypt, of a Jewish family that had fled Turkey, Mr. Levy-Lang was sent to France to study in 1954 and graduated at the top of his class at France's elite engineering school, the Ecole Polytechnique, which trains civil servants.
Because he was not yet a French citizen, he was barred from entering any of the elite state administrative corps where the top Polytechnique graduates traditionally go. Instead he joined Schlumberger Ltd., a U.S. oil-services company with French roots, in 1962, and that gave him international industry experience rare among French bankers.
Mr. Levy-Lang worked for Schlumberger in France and the United States for 12 years, and during that time he obtained a doctorate in business administration from Stanford University.
In 1974 he left Schlumberger, saying he wanted to raise his children in France. He was quickly hired as head of budgeting and control at Cie. Bancaire, Paribas' specialized retail financial services unit. He became chairman of the unit in 1982.Paribas chairman Michel Francois-Poncet, 64, is to stay at the company by Mr. Pebereau's request. BNP's chairman has met with members of the Paribas management board individually, and the executive committees of the two banks are to meet Saturday.
SocGen chairman Daniel Bouton has resigned from Paribas' board, as has Ernest-Antoine Seilliere, the head of the French employers association, who backed the Paribas-SocGen merger. Jean-Rene Fourtou, chairman of Rhone-Poulenc SA and an ally of Axa's Mr. Bebear, is to be named to the board. Mr. Fourtou resigned from the SocGen board when SocGen and Paribas announced their merger plan and was replaced by Mr. Levy-Lang.
Societe Generale, which won 26.37% of Paribas with its rival bid for the bank, said Wednesday that it will return the shares to the former owners, the French market regulator said.
