French banking major BNP Paribas has agreed to buy the Belgian Government’s 25 per cent stake in BNP Paribas Fortis for €3.25 billion (about $4.38 billion).
BNP Paribas has a significant presence in India.
“The Belgian State and BNP Paribas announce that they have reached an agreement for the transfer of 25 per cent shareholding held by the Belgian State in BNP Paribas Fortis to BNP Paribas for a price of €3.25 billion,” according to a joint statement issued last week by the Belgian Government and BNP Paribas.
The transaction would help the Belgian Government in shoring up its finances, while it would weigh down BNP Paribas Group’s core tier-I capital ratio, a key measure of a bank’s financial health.
The deal would generate about €900-million capital gain to the Belgian Government following the closing of the transaction.
“..We are confident in the ability of the bank to maintain its role in the Belgian economy. The sale proceeds of €3.25 billion will help the Belgian State to achieve its public debt objectives,” Prime Minister Elio Di Rupo and Minister of Finance Koen Geens said in the statement.
“...We will continue to develop BNP Paribas Fortis in accordance with the principles that have been ours during the integration phase, both in labour matters and in terms of support to the economy,” BNP Paribas CEO Jean-Laurent Bonnafe said.