French banking authorities have agreed to the merger of banks Crédit Agricole and Crédit Lyonnais as long as they sell 85 branches over a year and freeze development of their networks in certain regions for two years.
The CECEI banking and investment committee said the tie-up could go ahead only under these conditions to avoid competition conflicts.
With almost 9,200 branches of a total 35,000 in France, the new bank will be by far the biggest in terms of deposits and consumer credits.
The new bank would be number three in Europe, behind HSBC and Deutsche Bank. Of the 85 branches that must be sold, 70 are in the 18 French departements (counties) where the new group's position could significantly affect maintenance of effective competition, the CECEI said.
Approval for the deal must still be obtained from the French stock market watchdog COB and a calendar must be set by the Financial Markets Council.
If all goes according to plan, Crédit Lyonnais would come under effective control of Crédit Agricole around the end of April.
AFP