France Bank Mergers & Acquisitions (BNP Paribas)

Photo: A BNP Paribas pocket notebook and pen kit that forms part of my banking item collection.

BNP Paribas S.A.

BNP Paribas was formed in 1999 by the merger of Banque Nationale de Paris S.A. and investment bank Paribas S.A.

Banque Nationale de Paris

In 1966, the French government combined two of the four state-owned banks, Comptoir National d'Escompte de Paris and the Banque Nationale pour le Commerce et l'Industrie, into the new Banque Nationale de Paris (BNP).


Comptoir National d’Escompte de Paris (CNEP)

In 1848, a political and economic crisis hit France and many private bankers went bankrupt following yet another revolution. The government of the Second Republic intervened and established the Comptoir National d’Escompte de la ville de Paris (literally, the National Discount Counter of the City of Paris) to provide banking service for businesses in major towns. In 1851, the bank shortened its name to Comptoir National d’Escompte de Paris. This was further changed to Comptoir d’Escompte de Paris (CEP) in 1853 when the French state relinquished control.

Interestingly, in 1860, CEP opened its first international office in Shanghai, as the bank acted as the state collection agent of war indemnities owed to France by Imperial China. From 1860 to the 1880s, the bank also opened offices in Reunion Islands, Calcutta (Kolkata), Bombay (Mumbai), Hong Kong, Saigon (Ho Chi Minh City), London, Yokohama, Alexandria, Melbourne and Sydney to provide trade financing for French industries.

In 1887, the bank’s management was embroiled in a major scandal that caused a bank run. When it became clear the bank had become insolvent, the French state injected cash and the bank restored its old name of Comptoir National d’Escompte de Paris (CNEP). CNEP became a limited-liability company in 1889.

Between the 1910s and 1920s, CNEP greatly expanded its national branch network and became the third largest bank in France by 1929. The bank, partly due to its strong retail deposit base, survived the Great Depression and World War II relatively unscathed.

When peace returned in 1945, the de Gaulle government nationalized the Banque de France, plus the Big Four retail banks: Banque Nationale pour le Commerce et l’Industrie, Comptoir National d’Escompte de Paris, Crédit Lyonnais and Société Générale. The nationalization was part of the plans to coordinate the nationwide re-building efforts.

In the 1950s, CNEP lost its operations in Egypt and scaled back from Tunisia as the rise of nationalism in some former French colonies forced out foreign businesses.


Banque Nationale pour le Commerce et l’Industrie
(Comptoir National d’Escompte de Mulhouse, Banque Nationale de Crédit, Banque Française pour le Commerce et l’Industrie)

In the same year that CNEP was founded by the French state, a smaller counterpart, the Comptoir National d’Escompte de Mulhouse (CNEM) was established in Mulhouse, in the region of Alsace. In 1854, CNEM was no longer under state control and was renamed Comptoir d’Escompte de Mulhouse (CEM).

During the 1850s and 1860s, CEM rode on the industrializing economy and opened offices in other principal towns, including Lyon, Marseille, Le Havre and Paris.

In 1870, France found itself at the losing end of a war and lost the region of Alsace-Moselle to Germany. This created a major complication for CEM: it had now become a French bank operating in a German region. As France and Germany continued to dispute the ownership of Alsace over the next 40 years, CEM in 1913 finally decided to re-group its larger operations in France proper into a subsidiary called Banque Nationale de Crédit (BNC). Parent company Comptoir d’Escompte de Mulhouse operating within German-controlled Alsace, now actually only had three branches. Despite their parent-subsidiary relationship, the Comptoir and Banque Nationale de Crédit agreed to avoid doing business in each other’s domain.

In the 1910s, Banque Nationale de Crédit grew quickly by absorbing more than 30 other banks. And in 1922, the bank took over Banque Française pour le Commerce et l’Industrie (founded 1901), a bank that had financed France’s public utilities, railway and heavy industries, but was in need of new capital at the time of merger.

The end of World War I saw France re-gaining control of Alsace-Moselle, but this didn’t solve the CEM-BNC complication even though both were operating in France once again. Their prior non-competition agreement meant that the parent company CEM still could not operate anywhere in France outside of Alsace-Moselle. Animosities between the two banks became so bitter that Comptoir d’Escompte de Mulhouse sold its stake in BNC in 1918.

By 1930, however, Comptoir d’Escompte de Mulhouse realized that its home market of Alsace-Moselle was too limiting, and agreed to be acquired by its former subsidiary Banque Nationale de Crédit. The good times didn’t last for BNC, however, for the bank soon got into severe financial difficulties during the 1930s Depression. A state guarantee on the bank’s deposits failed to stem depositors from withdrawing their money and between April and December, 1931, Banque Nationale de Crédit’s share price fell 96%. The bank soon collapsed and was rescued by the government, which re-structured it into the Banque Nationale pour le Commerce et l’Industrie (BNCI) in 1932. Throughout the 1930s, BNCI also absorbed other ailing banks.

World War II significantly restricted BNCI’s domestic operations, and the bank turned its attention to the French overseas colonies and territories, such as Algeria, Morocco, Ivory Coast, Cameroon, the Congo, Senegal, Madagascar, Reunion Islands and the French West Indies. However, the “de-colonialization” in the 1950s and 1960s saw the French bank retreating from many former colonies.

In 1945, BNCI, along with three other big commercial banks and the Banque de France, were nationalized by the French government. Between 1945 and 1959, the Big Four hardly opened any new branches under state control.

In 1966, the French government merged two of the Big Four state-owned banks, the Comptoir National d’Escompte de Paris and the Banque Nationale pour le Commerce et l’Industrie to form the new Banque Nationale de Paris (BNP). The new bank combined CNEP’s stronghold in retail banking with BNCI’s expertise in corporate and international banking. In 1972, BNP and seven other European banks jointly created the Associated Banks of Europe Corporation (ABECOR) that specialized in medium-term financing. In 1979, BNP acquired a significant minority stake in BancWest Corp. (Bank of the West) of California. BancWest in 1998 acquired First Hawaiian Bank.

In 1993, the French government finally privatized Banque Nationale de Paris.


Paribas (originally Banque de Paris et des Pays-Bas)

Paribas itself can trace its origins to two banks: Banque de Crédit et de Dépôt des Pays-Bas (Bank of Credit and Deposit of the Netherlands) and the Banque de Paris. Of the two, the Banque de Crédit et de Dépôt des Pays-Bas was older, having been founded in Amsterdam in 1863. The bank was established by a private banker family with connections in the Netherlands, France, Belgium and Germany. The bank soon opened branches in Paris, Brussels, Antwerp and Geneva.

In 1869, the Banque de Paris was established with French, Belgian and Danish capital. The two banks merged in 1872 to form the Banque de Paris et des Pays-Bas (the Bank of Paris and the Netherlands). Right from its beginning, the bank has had a strong position in the investment underwriting business, and during its first year of existence, helped float a three-billion francs debt issue for the French government.

Between 1872 and 1913, Banque de Paris et des Pays-Bas became an international power house in underwriting sovereign loans for nation states, including France, Belgium, the French and Belgian colonies, Imperial Russia, Morocco, the Balkan states, the Scandinavian nations, and Latin American countries.

Acting also as a merchant bank, Banque de Paris et des Pays-Bas took equity interests in numerous French and foreign companies in the railway, electric utilities, tramway, iron and steel, and chemicals industries. The bank also at one point held interests in numerous banks, including Banco Español Credito (Spain), Banca Commerciale Italiana, Banque Russo-Asiatique (a leading bank in Russia at the time), as well as other banks in Bulgaria, Romania, Serbia, Egypt, Turkey, Morocco, Canada and Japan.

Following the 1917 the Bolsheviks revolution, however, the new regime confiscated all foreign businesses in Russia, and refused to honour the debts incurred during the Tsarist era. Some estimates put France’s total losses in Russia to be USD $4-billion. During the 1930s Great Depression, as demand for international financing dwindled, the bank retreated to its home markets of France, Belgium and the Netherlands.

France itself was devastated during World War II, and the Sovietization of Eastern Europe following the war further shrunk Banque de Paris et des Pays-Bas’ international operations. In 1945, under General de Gaulle’s government, France nationalized Banque de France plus the Big Four commercial banks to co-ordinate re-building efforts. The nationalized Big Four focused on channeling shorter-term savings into supporting state treasury issues. As a merchant and investment bank, Banque de Paris et des Pays-Bas escaped the government intervention and remained a private-sector concern.

Throughout the 1950s and 1960s, the bank provided crucial financing to rebuild France’s industries across a wide spectrum, and to facilitate French exports. The bank opened an office in New York in 1960, to be followed by others in London, Luxembourg, Moscow, the Middle East and the Far East throughout the next 20 years.

Following a major policy shift by the French government, consolidations in the banking sector heated up in earnest. Between 1966 and 1973, Banque de Paris et des Pays-Bas gradually acquired majority control in another merchant bank, the Compagnie Bancaire. In 1968, the bank acquired French retail bank Crédit du Nord. In the same year, Banque de Paris et des Pays-Bas and rival Compagnie de Suez fought over the control of CIC (Crédit Industriel et Commercial). The fight only ended in 1971 when Suez took over CIC but gave up Banque de l’Union Parisienne to Banque de Paris et des Pays-Bas.

The bank became a major player in the Eurobond (foreign-currency bonds issued in Europe) market during the 1970s in co-operation with British trading house S.G. Warburg. At the same time, it expanded into asset management and wealth management for the first time.

When a new socialist government under Pierre Mauroy took power in 1981, Banque de Paris et des Pays-Bas, along with 39 other banks and another financing firm Suez, were nationalized. At the same time, the bank’s name was changed to Compagnie Financière Paribas, Banque Paribas. The short name Paribas actually had been the bank’s telegraph address since the beginning of the 20th century. Another shift in France’s ever-changing political wind meant that in 1987, Paribas was privatized and floated back on the stock market, with AXA (French insurer), Power Corp. (a Canadian financial conglomerate), Sumitomo Life (Japan) and Kuwait Investment Authority amongst its strategic institutional shareholders.

In 1997, Paribas decided to return to its corporate and investment banking root and sold its French retail banking unit, Crédit du Nord, to rival Société Générale, for FRF 2.2-billion (USD $420-million). Crédit du Nord had 600 branches. Paribas then sold its Belgian and Dutch retail banking operations to Belgium’s Bacob-Arco Group (which became Dexia). In the same year, Compagnie Financière Paribas, Banque Paribas and majority-owned subsidiary Compagnie Bancaire decided to fully integrate into a new entity called Paribas S.A.

In early 1999, Paribas agreed to a 15.0-billion (USD $17.0-billion) buyout offer from Société Générale. Not wanting to be left behind, however, rival Banque Nationale de Paris made a hostile USD $21.o-billion counter-offer for Paribas, and an unimaginable, separate USD 19.6-billion offer for Société Générale (SocGen). BNP’s three-way merger proposal would have created the world's largest bank.

Uncertainties surrounding BNP’s insane ambition resulted in a drop of its share price, reducing the combined value of the offers for Paribas and SocGen to USD $38.0-billion. For months, all three banks engaged in a public relations battle in an attempt to win support from the public, shareholders and the French banking regulator. In the end, BNP succeeded in breaking SocGen and Paribas' merger plan, and acquired Paribas to form BNP Paribas. However, it could only secure 31.5% of SocGen's shares. The French banking regulator eventually vetoed BNP's merger plan to acquire Société Générale.

Recent transaction(s):

• In 2001, BNP Paribas bought the 55% of BancWest Corp. in the U.S. that it didn’t already own. BancWest owned Bank of the West in California and First Hawaiian Bank.
• In 2002, BNP Paribas bought United California Bank for USD $2.4-billion from UFJ Holdings of Japan.
• Also in 2002, BNP Paribas bought a 10.9% holding in Crédit Lyonnais S.A. from the French government for Eur 2.2-billion. Following a ruling by the French court in 2003 denying BNP Paribas' proposal to take over Crédit Lyonnais, BNP Paribas sold its minority stake in Crédit Lyonnais to Crédit Agricole S.A.
• In 2004, BNP Paribas bought Community First National Bank for USD $1.2-billion. Fargo, North Dakota-based Community First National operated 155 branches in 12 Midwest states.
• In 2005, BNP Paribas' BancWest Corp. subsidiary bought Omaha, Nebraska-based Commercial Federal Corp. for USD $1.36-billion. Commercial Federal Bank had 198 branches across the U.S. Midwest.
• In 2006, BNP Paribas bought Italian bank Banca Nazionale del Lavoro (BNL) for Eur 9.0-billion (USD $11.3-billion). This followed the Bank of Italy's veto of Unipol Assicurazioni's bid for Banca Nazionale del Lavoro.
• In 2007, BNP Paribas agreed to purchase 19% of Libya's Sahara Bank from Libya's central bank for Eur 145-million (USD $200-million). BNP Paribas would take over the operational control of the bank, and retained the right to take up 51% of the bank by 2012.
• In 2008, BNP Paribas bought Bank of America's hedge fund servicing prime brokerage unit for a reported USD $300-million (Eur 194-million). The unit has about 500 hedge fund clients.
• Following months of legal challenges and negotiations between Fortis shareholders, BNP Paribas, and the French, Belgian and Luxembourg governments, BNP Paribas in March 2009 agreed to acquire 75% of Fortis Bank Belgium and 25% of Fortis Insurance Belgium for Eur 9.625-billion (USD $12.25-billion). In addition, BNP Paribas also acquired a direct 16% stake in BGL (Fortis’ Luxembourg operations) for Eur 831-million (USD $1.06-billion). BNP Paribas controlled another 50% of BGL through 75%-owned Fortis Bank Belgium. Click here for details of Fortis’ collapse and the transactions.
• The purchase gave BNP Paribas 1,458 Fortis branches in Belgium, Luxembourg, Poland, Turkey, France, and other countries except the Netherlands. It would also gain more than Eur 239-billion of customer deposits, propelling BNP Paribas to become the largest bank in the Eurozone based on deposits.
• In October 2008 and March 2009, the French state injected a total of Eur 5.10-billion into BNP Paribas in return for non-voting shares of the bank.
• In September 2009, BNP Paribas raised Eur 4.3-billion (USD $6.27-billion) from a rights issue to repay the government the Eur 5.10-billion bailout funds.
• In November 2009, BNP Paribas’ Fortis Bank unit sold its 49% stake in Chinese fund manager ABN AMRO TEDA Fund Management for Eur 105-million (CAD $156-million, HKD $1.2-billion) to Canada’s Manulife Financial. BNP inherited the ABN AMRO TEDA stake from Fortis, which acquired parts of Dutch banking ABN AMRO Holding in 2007.
• In December 2012, BNP Paribas agreed to sell its 95.2% stake of BNP Paribas Egypt to Emirates National Bank of Dubai (Emirates NBD) for USD $500-million (Eur 378-million).  BNP Paribas Egypt had a network of 69 branches.
• In December 2013, BNP Paribas bought 98.5% of Poland's Bank BGZ from Rabobank of the Netherlands for PLN 4.2-billion (Eur 1.0-billion, USD $1.37-billion).  BGZ operated about 400 branches in Poland.
• in April 2016, BNP Paribas's American retail banking subsidiary BancWest Corp. floated part of the First Hawaiian Bank by selling 24.25-million shares. The IPO raised USD $557-million for the French bank. BNP Paribas continued to fully own Bank of the West's operations in contiguous United States.
• In April 2018, BNP Paribas' Polish subsidiary BGZ BNP Paribas agreed to buy the core banking operations of Raiffeisen Bank Polska for PLN 3.25-billion (EUR 775-million). Raiffeisen Bank Polska had a corporate and retail loan portfolio of PLN 19-billion (EUR 4.5-billion) and client deposits of PLN 34-billion (EUR 8.1-billion).
• Between May and July 2018, BNP Paribas sold another 28.6% of First Hawaiian Bank for USD $1.06-billion, decreasing its holding of the American bank to 33.3% from 61.9%.
• In December 2021, BNP Paribas announced that it was selling its San Francisco-based Bank of the West to Canada's Bank of Montreal for EUR 14.4-billion (USD $16.3-billion, CAD $21.07-billion) in cash. Bank of the West served 1.8 million clients through 514 branches in 24 states (primarily in the U.S. West Coast and Midwest) with 9,000 employees. The bank had US$56 billion of loans and US$89 billion of deposits.
• In April 2024, BNP Paribas agreed to acquire Fosun Group’s 9% shareholding in Belgian insurer Ageas for around  EUR 730-million. BNP Paribas and Ageas have been partners for many years via the joint shareholding of  AG Insurance (75% owned by Ageas and 25% by BNP Paribas Fortis). BNP Paribas Fortis is a longstanding distribution partner to the AG Insurance’s Belgian insurance activities.

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France Bank Mergers & Acquisitions (Crédit Agricole)

Photo: Crédit Agricole is a major sponsor of the competitive cycling races. Seen here is crowd favourite Norwegian champion Thor Hushovd during stage 3 of the Amgen Tour of California competition in February 2007. Crédit Agricole’s stylized "CA" logos can be seen all over his team jersey.

With special thanks to Mike Norris for granting me the permission to use this photo. You can see more of Mike Norris' other photographs via this link: http://www.flickr.com/photos/mnorri/

Crédit Agricole S.A.

The present-day Crédit Agricole group can trace its history to three major financial institutions: the original Crédit Agricole group of agricultural credit unions, Banque Indosuez and Crédit Lyonnais.


Banque Indosuez (Banque de l’Indochine and Banque de Suez et de l’Union des Mines)

Banque de l’Indochine was established in Paris in 1875 to issue banknotes and to provide banking services in Indochina (Vietnam, then a French colony). From its Saigon (Ho Chi Minh City) base, the bank opened branches in Haiphong in 1885 and Hanoi in 1887. In China, the bank opened branches in Canton (Guangzhou), Shanghai, Tientsin (Tianjin) and Peking (Beijing) during the 1890s and 1900s, where the bank financed French-owned infrastructures, underwrote Imperial China’s sovereign debts, as well as provided trade financing. The bank began operating in Hong Kong in 1894 and Singapore in 1905, and also operated in other parts of Southeast Asia such as Thailand.

Outside of the Far East, the Banque de l’Indochine operated in Tahiti and New Caledonia, both French territories in the Pacific, as well as in French Somaliland (present-day Djibouti).

The Compagnie universelle du canal maritime de Suez was created in 1858 to build a maritime passage in Egypt to link the Mediterranean Sea with the Red Sea. The 160-km Suez Canal opened for business in 1869, greatly shortening the voyage between Europe and the Indian Ocean. In 1875, Egypt sold its 44% stake in the canal to Britain following an economic and fiscal crisis.

In 1956, a political crisis over the sovereignty and control of the Suez Canal led to its nationalization by Egypt. Having lost its investment in the canal, the Compagnie universelle du canal maritime de Suez transformed itself into the Compagnie Financière de Suez in 1958. A bank subsidiary was created by Suez one year later. In 1966, the Banque de la Compagnie Financière de Suez was renamed Banque de Suez et de l’Union des Mines.

In 1974, the Banque de l’Indochine and Banque de Suez et de l’Union des Mines merged to form the Banque de l’Indochine et de Suez, combining their Asian operations and corporate banking specialties together. The bank’s name was subsequently shortened to Banque Indosuez. Crédit Agricole acquired Banque Indosuez between 1995 and 1996.


Crédit Agricole

Crédit Agricole was created in 1894 by the French parliament to establish co-operative, agricultural credit unions to facilitate lending to small family farms. These private-sector co-operatives were created locally and owned mutually by their clients (members).

However, the mere creation of the agricultural credit unions failed to ease lending for the small farms. The credit unions were poorly-capitalized and the farmers often were too poor to make meaningful deposits to the banks, or lacked the appropriate collateral to obtain loans. Between 1898 and 1899, the French government requested the Banque de France to accept the discounted notes from Crédit Agricole’s credit unions, as well as to inject 40-million francs into the banks. Crédit Agricole then set up nine Caisses Régionales de Crédit Agricole Mutuel (the "regional banks") to co-ordinate and to manage the local credit unions.

In 1920, the Ministry of Agriculture created a national-level entity to act as the central, clearing bank for the caisses régionales and their local credit unions. In 1926, this public-sector entity was renamed the Caisse National de Crédit Agricole (CNCA). The credit unions provided loans to farmers, rural tradesmen, and during the 1920s and 1930s, financed the electrification of the French countryside. Throughout the Depression years, a number of agricultural credit unions encountered liquidity challenges and had to be bailed out by CNCA.

Following the end of World War II, Crédit Agricole opened thousands of new offices all over the French countryside and greatly expanded its retail deposit base. Gradually, Crédit Agricole's funding source moved away from the French state and became self-reliant. In 1959, for the first time the credit unions were allowed by the government to offer mortgage loans to all rural customers, regardless of their membership status in the co-operatives. It was only in 1991, however, when the last restrictions on Crédit Agricole's permitted activities (in terms of the ability to deal with both personal and corporate clients) were eliminated.

During the 1960s, in preparation for the creation of the Common Market (the predecessor of the European Union), the bank implemented a modernization plan in such aspects as management, corporate governance, as well as product lines. Crédit Agricole was finally given financial autonomy in 1966, and deposits were no longer required to pass through the French Treasury. CNCA was now solely responsible for the profits and losses of the caisses régionales.

In 1988, umbrella entity CNCA became a joint-stock company and was semi-demutualized (but not floated on the stock market). Ninety percent of CNCA’s shares were distributed to the caisses régionales in proportion to their total assets, with the rest of the shares distributed to the banks’ then and former employees. However, as the caisses régionales were still mutually-owned by their members, the CNCA group had a complex corporate structure where the umbrella entity was a joint-stock company owned and controlled by its subsidiaries, which were in turn mutually-owned by the members. At this point, CNCA still did not own any of the caisses régionales or the local credit unions that carried out the bulk of the business.

In 2001, CNCA was re-named Crédit Agricole S.A. (CASA) and acquired 25% stakes in 38 of the 39 caisses régionales and the more than 2,000 local credit unions. At the same time, the caisses régionales sold part of their holdings in Crédit Agricole S.A. on the Paris stock exchange. With these manoeuvres, the mutually-owned caisses régionales and Crédit Agricole S.A. now cross-held each other. As of 2009, Crédit Agricole S.A. controlled 25% of 38 of the 39 caisses régionales, as well as all of Le Crédit Lyonnais. The caisses régionales in turn collectively held 55% of Crédit Agricole S.A., with the remaining 45% of Crédit Agricole S.A. shares in free float.


Crédit Lyonnais (Le Crédit Lyonnais)

Situated in southeastern France, Lyon was a major commercial centre during the Renaissance and its trade fairs were well-known across Europe. In the 18th and 19th centuries, Lyon’s businessmen turned the city into an important banking and silk-trading and manufacturing centre.

Crédit Lyonnais was established in 1863 as a deposit bank for the local businesses. In 1870, the bank moved some of its securities and physical assets to London for safekeeping due to the Franco-Prussian War, the London office became the bank’s first foreign branch. During the 1870s, the bank expanded rapidly in southeastern France as well as in Paris. By 1900, the bank had a network of 200 branches in France, and 20 overseas offices in Constantinople (Istanbul), Alexandria, Geneva, Madrid, Vienna, St. Petersburg and Moscow. In 1887, when Bismarck forced the German banks to curtail their lending to Russia, French banks, including Crédit Lyonnais, took over a large percentage of Russia’s foreign borrowing.

By the turn of the 20th century, Crédit Lyonnais had become the world’s largest bank in terms of assets. However, World War I changed everything for the bank. After the 1917 revolution, the Bolsheviks confiscated all foreign businesses in Russia, and refused to honour Russia’s debt incurred during the Tsarist era. France’s losses in Russia is said to have been USD $4-billion.

Crédit Lyonnais suffered, but survived, the difficult inter-war years and World War II. In 1946, however, the freshly-liberated France decided to nationalize the Banque de France, plus the country’s four largest commercial banks, including Crédit Lyonnais.

Under state control, ambitious overseas expansion began in the 1970s in Europe, Asia and the U.S. During the 1980s, French politics swung between socialist and right-wing ideology, and the privatization of Crédit Lyonnais was debated but did not materialize.

In the 1990s, however, a series of corporate scandals hit Crédit Lyonnais; the most infamous one involved the bank’s Dutch unit lending USD $1-billion to Giancarlo Parretti to take over Metro-Goldwyn-Mayer in 1990. MGM went bankrupt almost right away, causing a huge loss at the bank. The bank also suffered enormous losses from bad loans made to Olympia & York and other real estate developers. In 1995, Crédit Lyonnais sold its Brazilian unit Banco Francês e Brasileiro (BFB) to Banco Itaú (now Itaú Unibanco).

After a series of state-imposed reforms, Crédit Lyonnais was floated on the Paris stock exchange in 1999. In 2003, the bank was taken over by Crédit Agricole.

Recent transaction(s):

• In July 1995, Crédit Agricole acquired 51% of Banque Indosuez from the Suez group for FFr 6.3-billion. In December 1996, Crédit Agricole bought the remaining 49% of Banque Indosuez for FFr 5.6-billion. The entire Banque Indosuez cost about USD $2.2-billion. Crédit Agricole’s investment banking and capital market operations were combined with those of Banque Indosuez to form Crédit Agricole Indosuez.
• In 2001, Crédit Agricole bought 81% of Poland's Lukas S.A. and Lukas Bank. Lukas Bank had about 100 branches in the country.
• Crédit Agricole first took a 10% stake in fellow French bank Crédit Lyonnais in 1999 when the latter was privatized. By 2002, both BNP Paribas and Crédit Agricole were actively buying up shares of Crédit Lyonnais in an attempt to gain control. Crédit Agricole, then holding a 17.4% of Crédit Lyonnais, offered Eur 16.0-billion (USD $16.5-billion) for the 82.6% shares it didn't yet own, and eventually received approval from the French government in 2003 to acquire all of Crédit Lyonnais. The French government was said to favour Crédit Agricole's offer over BNP Paribas' proposal because the government was still upset by BNP's very public and hostile takeover battle with Société Générale for Paribas in 2000. Crédit Lyonnais was subsequently re-branded as Le Crédit Lyonnais (LCL).
• In 2004, Crédit Agricole merged Crédit Agricole Indosuez with Crédit Lyonnais' investment banking division to form a new company named Calyon, combining the CA initials with the “lyon” part of Crédit Lyonnais. In 2010, Calyon was renamed Crédit Agricole Corporate & Investment Bank.
• In 2005, Crédit Agricole bought 71% of Serbia’s Meridian Bank AD.
• In 2006, the bank bought in 50/50 partnership with Portugal's Banco Espirito Santo life insurer Tranqulidade Vida for Eur 900-million.
• In 2006, the bank acquired JSC Index Bank of Ukraine for USH 1.33-billion (Eur 220-million). JSC Index had more than 200 offices in the country.
• In 2006, Crédit Agricole made an offer to acquire all outstanding shares of Greece’s Emporiki Bank for Eur 25 per share. The offer valued the entire Greek bank at Eur 3.3-billion. Emporiki had 370 branches in Greece and dozens more in the Balkans. Crédit Agricole eventually gained about 72% of the bank.
• In 2006, Banca Intesa agreed to sell 652 branches in northern Italy to Crédit Agricole for Eur 6.0-billion (USD $7.52-billion) as compensation for the French bank's loss of influence over Banca Intesa. Crédit Agricole's 18% stake in Banca Intesa would be diluted to just about 10% after the Intesa-Sanpaolo IMI merger. As Crédit Agricole was determined to maintain a significant presence in Italy, it agreed to support Banca Intesa's purchase of Sanpaolo IMI in exchange for some Italian branches and clients.
• In 2006, Crédit Agricole approached British mortgage bank Alliance & Leicester for a possible acquisition. Rumours at the time suggested that Crédit Agricole offered GBP 5.2-billion to 5.8-billion for Alliance & Leicester. However, the British bank spurned the offer and the French bank walked away. Just merely two years later, Alliance & Leicester was in such financial distress during the global credit crisis that it accepted a much lower GBP 1.26-billion offer from Spanish bank Banco Santander in July 2008.
• In 2007, the bank acquired a 19.53% stake in Spain's Bankinter SA for Eur 809-million (USD $1.20-billion). Bankinter was founded in 1965 by Banco Santander and Bank of America as an industrial bank. Bankinter gained independence from the two founding banks in 1972 when it was listed on the Madrid stock exchange. Bankinter has since expanded into the retail banking sector and had a network of 347 branches. However, some analysts criticised the high price Crédit Agricole paid for Bankinter.
• In July 2008, Crédit Agricole raised Eur 5.9-billion from the market by issuing preferred securities.
• In October 2008, the French government injected Eur 10.5-billion to the banking system in the form of subordinated debt during the global credit crisis. Banque Populaire obtained Eur 950-million from the state; BNP Paribas obtained Eur 2.55-billion; Caisse d'Epargne obtained Eur 1.1-billion, Crédit Agricole obtained Eur 3-billion; Crédit Mutuel obtained Eur 1.2-billion; Société Générale obtained Eur 1.7-billion.
• In early 2009, Crédit Agricole and rival Société Générale agreed to merge their asset management operations into a new firm called Amundi Asset Management. Crédit Agricole would own 75% of Amundi and Société Générale would own the rest. Amundi would have Eur 638-billion (USD $827-billion) under management and would become the fourth biggest manager in Europe. The two French banks agreed to maintain their stake for five years, but planned to launch an IPO eventually.
• In October 2009, Crédit Agricole repaid the Eur 3-billion (USD $4.46-billion) in state aid it received from the French government.
• In July 2012, Crédit Agricole sold a 19.9% stake in Hong Kong-based investment bank CLSA (formerly Credit Lyonnais Securities (Asia)) to China's largest brokerage CITIC Securities Co. for USD $310-million (Eur 253-million). CITIC Securities also gained the exclusive right to buy the remaining 80.1% of CLSA.
• In October 2012, Crédit Agricole sold its Greek subsidiary Emporiki Bank to Alpha Bank for practically nothing (Eur 1, USD $1.31).  Furthermore, Crédit Agricole had to inject Eur 550-million into Emporiki, maintain a Eur 1.4-billion credit line to Emporiki for three years, and subscribe to Eur 150-million of Alpha Bank's convertible bonds as part of the sale agreement.  The French bank had to pay Alpha to take over Emporiki as the Greek sovereign debt crisis can potentially expose Crédit Agricole to losses much higher than the amount it's costing to get rid of the risk. Emporiki operated about 370 branches in Greece.
• In July 2013, Crédit Agricole sold its remaining 80.1% stake in Hong Kong-based investment bank CLSA to China's CITIC Securities Co. Ltd. for USD $842-million.
• In January 2014, Crédit Agricole agreed to sell its Bulgarian operations to Corporate Commercial Bank AD.
• Between January and September 2013, Crédit Agricole sold its entire 19.53% stake in Spain's Bankinter SA at a loss.
• In May 2014, Crédit Agricole sold its 50% stake in brokerage firm Newedge Group to Société Générale (SocGen) for EUR 275-million. SocGen already owned 50% of Newedge and would now become its sole parent. At the same time, SocGen sold a 5% stake of asset manager Amundi to Crédit Agricole for EUR 337.5-million. Following the transaction, Crédit Agricole would own 80% of Amundi and SocGen would own 20%.
• In August 2014, Crédit Agricole wrote off its stake in Portugal's Banco Espitiro Santo SA (BES) to zero, suffering a loss of EUR 708-million. Crédit Agricole's investment in BES dates back to 1991, when the French bank partnered with the Espirito Santo Financial Group to form the BESPAR – Sociedade Gestora de Participações Sociais, S.A. to privatize and float the formerly state-owned BES.
• In May 2015, Crédit Agricole sold its Albanian operations to Tranzit Sh.p.k., subsidiary of NCH Capital Inc.
• In November 2015, Crédit Agricole and Société Générale (SocGen) agreed to float their jointly-owned asset manager Amundi on the Paris Stock Exchange. The majority of the public float came from SocGen, which sold its entire 20% stake in Amundi for EUR 1.5-billion (USD $1.6-billion). Meanwhile, Crédit Agricole sold a 2.3% stake in Amundi in an over-allotment for EUR 170-million, and another 2.0% stake to the Agricultural Bank of China for EUR 150-million.
• In February 2016, Crédit Agricole simplified its corporate structure and eliminated its parent-subsidiary cross-holding framework when parent company Crédit Agricole S.A (CASA) sold its 25% holdings in the 39 subsidiary mutual banks back to the mutuals for EUR 18.0-billion (USD $20.05-billion). Following the transaction, the 39 mutual banks would continue to collectively own 56% of the listed CASA, but CASA would no longer have any stake in any of the mutual banks under the Crédit Agricole banner
• In December 2016, Crédit Agricole's majority-owned asset manager Amundi agreed to buy UniCredit's Pioneer Investments for EUR 3.545-billion (USD $3.72-billion) in cash. Adding Pioneer's EUR 222-billion of assets under management will raise Amundi's total to EUR 1,276-billion (or 1.276-trillion), making it the 8th largest asset manager in the world. Amundi will finance part of the purchase with a rights issue, which Crédit Agricole has agreed to subscribe in order to maintain a minimum of 66.7% stake in Amundi.
• In September 2017, Crédit Agricole sold a 16.2% stake in its Saudi Arabian associate bank Banque Saudi Fransi (BSF) to Saudi conglomerate Kingdom Holding Company for EUR 1.3-billion (SAR 5.8-billion). Following the sale, Crédit Agricole's stake in BSF would be reduced to 14.9%.

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France Bank Mergers & Acquisitions (Société Générale)

Photo: One of Société Générale's London offices near the Tower of London. Photo was taken during my trip to London in 2007.


Société Générale S.A.
(Also known as SOCIETE GENERALE, SocGen)

Société Générale was established in 1864 by an imperial decree signed by Napoleon III. Its full name at the time was Société Générale pour Favoriser le Développement du Commerce et de l'Industrie en France. As the name suggests, the bank’s mandate was to promote large, long-term commercial and industrial development.

At the end of World War II, Société Générale, along with Crédit Lyonnais, Comptoir National d'Escompte and Banque Nationale pour le Commerce et l'Industrie were nationalized in 1945 by the French government to stabilize the fiscal and monetary systems. In 1987, SocGen (as it's often referred to as) became the first of the Big Three banks to be floated on the stock market.

In February 1998, SocGen acquired New York-based investment bank Cowen & Company for USD $540-million. Cowen specialized in the health care, technology and communications industries. The business was renamed SG Cowen Securities after being merged with SocGen's existing American investment banking operations.

In March 1999, SocGen entered into an agreement to merge with investment bank Paribas S.A. in a Eur 17.0-billion (USD $17.7-billion) transaction. However, Banque Nationale de Paris (BNP) also aspired to expand and soon made a hostile Eur 19.8-billion (USD $21.o-billion) counter-offer for Paribas, and a separate Eur 18.5-billion (USD 19.6-billion) offer for Société Générale itself. Had BNP succeeded, the three-way merger would have created the world's then biggest bank with assets of over USD $1-trillion.

In June 1999, Société Générale raised its offer for Paribas to Eur 20.3-billion (USD $21.1-billion). Meanwhile, the uncertainties about the messy bidding war resulted in a drop in BNP's share prices, lowering the combined value of its offer for Paribas and SocGen to Eur 36.0-billion (USD $37.9-billion). For months, all three banks engaged in a public relations battle in an attempt to win support from the public, shareholders and the French government. In the end, BNP succeeded in breaking SocGen and Paribas' merger proposal, and acquired Paribas to form BNP Paribas S.A. However, it could only secure 31.5% of SocGen's shares. Following a court battle, the French banking regulator ruled that BNP's stake in Société Générale was below the controlling threshold. Furthermore, BNP was instructed to give up its stake in SocGen, essentially vetoing BNP's three-way merger plan.

In recent years, Société Générale has been focusing on the Central and Eastern European (CEE) market.

Recent transaction(s):

• In 1999, Société Générale (SocGen) bought 97.95% of Bulgaria's Expressbank AD.
• In 2001, SocGen acquired more than 96% of Slovenia's SKA Banka, d.d. SKA Banka was founded in 1978 as Stanovanjsko-Komunalna Banka, offering residential mortgages as well as financing municipal construction. As of 2007, SKB operated 57 branches in Slovenia.
• In 2001, SocGen bought 60% of Komercni Banka from the Czech government for Euro 1.19-billion (USD $1.01-billion).
• In 2003, SocGen bought 50.7% of Ghana's SSB Bank Ltd. SSB Bank is Ghana's No. 4 bank and operated 38 branches.
• In 2003, SocGen bought Banca Romana pentru Dezvoltare (BRD) of Romania.
• In 2004, bought 50.17% of the General Bank of Greece (GBG) from the Greek Army Pension Fund. Following the purchase, GBG was renamed Geniki Bank.
• Also in 2004, SocGen acquired 75% of Hamburg-based Hanseatic Bank from the Otto Group for EUR 190-million.  Hanseatic is a small German bank offering deposit and real-estate loan products.
• In 2005, SocGenbought 64.4% of Montenegro's Podgoricka Banka for Eur 14.2-million. Podgoricka Banka had 19 branches in the former Yugoslav nation.
• Also in 2005, SocGen bought Poland's Euro Bank SA (also branded as eurobank). Euro Bank had 110 offices in Poland offering consumer credit products.
• Also in 2005, SocGen offered Eur 345-million (USD $420-million) for Egypt's Misr International Bank (MiBank). Shareholders owning 69.7% of Misr International had agreed to tender to Société Générale's offer.
• In 2006, SocGen bought Croatia’s HVB Splitska Banka for HRK 7.29-billion (Eur 1.0-billion) from Italy’s UniCredit SpA, which was forced to sell HVB Splitska because UniCredit's takeover of Germany's HVB Group had given the combined bank more than the 10% market-share ceiling permitted in Croatia. HVB Splitska Banka operated 112 branches in Croatia.
• In July 2006, SocGen spun off 75% of its SG Cowen Securities in an IPO for USD $180-million. The newly-listed business was renamed Cowen Group Inc.
• In 2006, SocGen bought, in two stages, a total of 20% of Russia's Rosbank for USD $634-million.
• In 2007, SocGen's brokerage unit Fimat merged with Crédit Agricole's Calyon's brokerage unit Calyon Financial. The new entity was named Newedge and became a 50/50 joint-venture of SocGen and Crédit Agricole’s Calyon.
• In 2007, SocGen bought 70.57% of Moldova's BC Mobiasbanca for MDL 303-million (Eur 18-million, USD $24-million).
• In 2007, SocGen bought Brazil's consumer finance bank Banco Cacique for BRL 850-million (Eur 309-million, USD $407-million). Banco Cacique had a network of 190 branches, 900,000 individual clients and 350,000 active credit cards.
• In January 2008, SocGen discovered that its “rogue” trader Jérôme Kerviel had amassed unauthorized trading positions totalling Eur 50-billion (USD $74.5-billion). The bank immediately and secretly unwound its exposure by selling Eur 18-billion worth of DAX index futures, Eur 30-billion of the DJ Euro Stoxx 50 futures and Eur 2-billion of FTSE 100 futures. SocGen’s sale of these index futures was said to have deepened the global market rout on 2008-01-22. Following the unwinding, SocGen disclosed that it had lost Eur 4.9-billion (USD $7.2-billion) from Kerviel’s trades. In order to restore the depleted capital, SocGen raised Eur 5.5-billion (USD $8.44-billion) from a rights issue in March.
• Also in 2008, SocGen bought Capitalia’s securities services business from Italy’s UniCredit for Eur 195-million. The unit purchased had Eur 102-billion of assets under custody and another Eur 27-billion under administration.
• In 2008, SocGen indicated that it would exercise its call option to acquire another 30% of Russia's Rosbank for USD $1.7-billion. The exercise of this option would trigger a mandatory offer to current minority shareholders that will lead to an increase of SocGen's stake in Rosbank to 57.8%. Rosbank served 3 million individual clients, 60,000 small- to medium-size enterprise accounts and 7,000 corporate clients through 600 branches.
• Also in 2008, SocGen bought Ikar Bank of Ukraine, which specialized in consumer finance through 14 branches.
• In 2008, SocGen bought 15% of South-East Asia Bank (SeA Bank), a small Vietnamese bank with 55 branches.
• In early 2009, Crédit Agricole and fellow French bank Société Générale agreed to merge their asset management operations. Crédit Agricole would own 75% of the combined entity and Société Générale would own the rest. The new entity would have Eur 591-billion (USD $766-billion) under management and would be the fourth biggest in Europe. The new firm, originally known as CAAM-SGAM, was later renamed Amundi Asset Management and said to be worth about Eur 6-billion according to SocGen’s own estimates. The two French banks agreed to maintain their stakes for five years, but planned to launch an IPO and sell part of stake to the public in the future.
• Between November 2008 and May 2009, the French government subscribed to a total of Eur 3.4-billion of SocGen securities as part of the French Economic Support Plan.
• In October 2009, SocGen raised Eur 4.8-billion (USD $7-billion) in a rights issue. The bank planned to use Eur 3.4-billion (USD $5-billion) to repay state aid and the rest to make acquisitions and boost capital strength.
• In August 2012, SocGen sold its Los Angeles-based majority-owned asset manager TCW Group Inc. to an investor group led by Carlyle Group LP. The deal valued all of TCW at between USD $700-million and $800-million.  TCW managed USD $131-billion of assets.
• In October 2012, SocGen sold its loss-making Greek subsidiary Geniki Bank to Piraeus Bank for practically nothing (Eur 1-million, USD $1.31-million).  Furthermore, SocGen had to inject Eur 281-million into Geniki and subscribe to Eur 163-million of Piraeus Bank's convertible bonds as part of the sale agreement.  SocGen had to literally pay Piraeus to take over Geniki as the Greek sovereign debt crisis can potentially expose SocGen to losses much higher than the Eur 444-million it's costing to get rid of the Greek subsidiary. Geniki operated about 140 branches in Greece.
• In December 2012, SocGen sold its 77.2% stake in Cairo-based National Société Générale Bank SAE (NSGB) for USD $1.97-billion (Eur 1.50-billion) to Qatar National Bank SAQ.  National Société Générale Bank served 700,000 clients through 160 branches in Egypt.
• In November 2013, SocGen bought the 50% of brokerage firm Newedge Group that it didn't already own from partner Crédit Agricole for Eur 275-million, meanwhile, it sold a 5% stake in asset manager Amundi to Crédit Agricole for Eur 337.5-million. Following the transactions, SocGen would own all of Newedge Group and 20% of Amundi.
• In March 2014, SocGen sold its Asian private banking business to Singapore's DBS for USD $220-million (Eur 158-million). The business sold had USD $12.6-billion of assets under management.
• In May 2014, SocGen wrote down its Russian retail subsidiary Rosbank's value by Eur 525-million (USD $731-million). Tension between the West and Russia has been high since the geopolitical crisis between Ukraine and Russia led to an exodus of capital from Russia, as well as a sharp drop of the Russian rouble and stock market.
• In November 2015, SocGen sold its entire 20% stake in Amundi Asset Management in an IPO for EUR 1.5-billion (USD $1.6-billion). Amundi was listed on the Paris Stock Exchange.
• In November 2018, SocGen sold its Polish subsidiary Euro Bank S.A. (also known as "eurobank") to Bank Millennium S.A. for PLN 1.83-billion (EUR 426-million, USD $485-million). Bank Millennium is 50.1% owned by Portugal's Banco Comercial Português (BCP). Euro Bank's 250 branches and another 251 franchised locations will join Bank Millennium's 359 branches, with some branch closures expected.
• In December 2019, SocGen agreed to sell its Norwegian-based SG Finans division to Helsinki-based Nordea Bank for EUR 575-million (USD $634-million). SG Finans provides equipment finance and factoring solutions in Norway, Denmark and Sweden.

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