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Commercial banks

French Bank BNP Launches Hostile Bid for Societe Generale and Paribas

Strategic Insights

— 1 min read

The Banque Nationale de Paris has made a hostile bid to become the largest bank in Europe by acquiring Societe Generale SA and Paribas SA, with a total bid value of $37.2 billion. The heads of the targeted banks have responded negatively to the proposal, calling it "rash." The French regulatory agency, Conseil des Marches Financiers, estimates that the combined bank would have a market capitalization of $50 billion and equity of over $35 billion.

Key Takeaways:

  • The Banque Nationale de Paris has launched a hostile bid to acquire Societe Generale SA and Paribas SA, valued at $37.2 billion.
  • The combined bank would be the largest in Europe by market capitalization, assets, and equity, with an estimated $50 billion market capitalization and over $35 billion in equity.
  • The heads of Societe Generale and Paribas have described the proposal as "rash" and have requested more time to study the financial and business details of the BNP offer.
  • The board of Societe Generale and Paribas will meet directly to discuss the proposal.
  • The total number of shares being offered by BNP in exchange for Paribas shares is 11, while the number of shares being offered for SocGen shares is 15.
  • This move follows Societe Generale's recent purchase of Paribas for $17 billion to form the second-largest bank in Europe.
  • There is widespread speculation about a new wave of mergers and takeovers in France and across Europe.

Statistics:

  • $37.2 billion: Total bid value of BNP's hostile bid for Societe Generale and Paribas.
  • $50 billion: Estimated market capitalization of the combined BNP, Paribas and SocGen bank.
  • $35 billion: Estimated equity of the combined BNP, Paribas and SocGen bank.
  • 23%: Increase in Banque Nationale de Paris' net income in 1998.
  • $1 billion: Banque Nationale de Paris' net income in 1998.
  • 11: Number of BNP shares offered for every 8 Paribas shares.
  • 15: Number of BNP shares offered for every 7 SocGen shares.
  • $17 billion: Value of Societe Generale's purchase of Paribas to form the second-largest bank in Europe.
  • $60 billion: Value of Olivetti SpA's hostile bid for Telecom Italia in Italy.
  • $11.3 billion: Value of Banco Santander's acquisition of Banco Central Hispano in Spain.
  • $1 billion: Net income of Banque Nationale de Paris in 1998.

Sources:

  • "French Bank Launches Hostile Bid for Rivals," United Press International, March 10, 1999.
  • "Banque Nationale de Paris," News Provided by COMTEX (http://www.comtexnews.com).

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