BNP Paribas, France's biggest listed bank, said this morning it was paying €14.5 billion ($20.1 billion) to take control of European financial group Fortis and boost its European market share.
BNP Paribas will buy control of Fortis's banking businesses in Belgium and Luxembourg for €9 billion, funded through the issuance of €132.6 million new BNP Paribas shares.
The French bank will also buy Fortis Insurance Belgium for €5.5 billion in cash, it said in a statement.
It added that the takeover would boost earnings from the first year and would improve its capital ratios, enabling BNP Paribas to become the euro zone's largest deposit bank.
The transaction would also see €10.4 billion worth of Fortis's most impaired assets within the structured credit portfolio ring-fenced.
BNP Paribas shares closed up €9.4 per cent at €71.35 on Friday, giving the bank a market capitalisation of around €65 billion.
The stock has fallen around 4 per cent since the start of the year, compared to a 32 per cent decline in the DJ Stoxx European bank sector.
Reuters