Fortis, the Belgo-Dutch insurance and banking group, and Générale de Banque, Belgium's biggest bank are set to merge in one of the first cross-border investment consolidations in Europe.
With combined assets of around Ecu300bn,($272bn) the new group will become one of Europe's top 15 financial service operators.
The move to join forces follows the recent trend towards consolidation in Europe, which has been accelerated by European monetary union and the imminent introduction of the Euro.
The unified Benelux platform is expected to allow the group further international expansion opportunities, particularly in Europe, the US and Asia, through a combination of extended customer bases and stronger distribution capacity.
With world wide assets of $122bn, according to figures from consultants Mercer, Fortis has traditionally been strong in the Belgian investment market, managing 24 pension funds against the 65 in Holland, both of which comprise its European pensions assets of $9.1bn, at mid 1997.
Générale Bank, has retained much more of an even split, with 40 funds managed in Belgium, 22 in Holland and a further 26 divided between a mix of other countries. These represent total European pension assets of $5.2bn, with the worldwide total for the group at $54bn.
Commenting on the merger and the implications for a joined asset management group, Corneel Maes of Générale Bank, says: The organisation of the asset management business is still to be decided, but I suspect with the probable movement of the banking and investment side of affairs to Brussels, that this will also be the case. It is certainly a priority part of the group that we will be working hard to ensure the best possible set up for."
Paul de Smet, a partner at Conac consultants, Brussels is not convinced though. "Certainly, this merger of-fers an enormous strengthening of domestic investment in Belgium and Holland, however I can't see that it provides much more international ex-posure than the companies already have. For this they will need to make future acquisitions on a global scale."
Equally, the merged group is ex-pected to deliver efficiency gains in operations, infrastructure and distribution, with savings expected in material costs. Hugh Wheelan"