Sunday, March 8, 2009

New Agreement - Fortis , BNP Paribas and Belgium






Fortis holding, SFPI/FPIM and BNP Paribas negotiated a new set of revised terms for the transaction on 6th March 2009. However, the terms require the approval of FORTIS shareholders. The major features of the revised terms are as follows :


Fortis holding will sell 25% of the shares in Fortis Insurance Belgium (FIB) to Fortis Bank for EUR 1,375. ( current valuation of FIB would be 5.5 Billion Euros).
  • The agreement will be in force until 2020 and cannot be terminated unilaterally.Fortis Holding and BNP Paribas would work together in the field of insurance transactions and Fortis would be designated as the preferred commercial partner of BNP.
  • Fortis Bank would get a representation in the Board of Directors of FIB.
  • SPV will purchase 2 Billion Euro worth of Structured Credit portfolio of Fortis Bank.. Fortis holding will doesn’t have to make the upfront payment of2.35 billion Euros ( CASHES instrument settlement)

Background :
Belgium is selling unprofitable Fortis banking operations to BNP Paribas. This was triggered by the Lehman brothers bankruptcy and problems at Fortis and Dexia SA.BNP Paribas initially agreed to acquire Fortis assets in Luxembourg and Belgium for 14.5 Billion Euros, however this proposal ran into some rough weather because of the opposition by Fortis Shareholders

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