EUROPE - French bank BNP Paribas has acquired Belgo-Dutch bancassurance group Fortis' investments business in a deal dubbed a "quantum leap" for the bank's asset management.

It is as yet unclear whether BNP Paribas will integrate its asset management business, Fortis Investments - which includes the newly-acquired the asset management arm of Dutch nationalised bank ABN Amro - into its own asset management operation.

That said, Baudoin Prot, chief executive of BNP Paribas told analysts in a briefing earlier today that the firm plans on "integrating quality franchises".

Dubbing the acquisition of Fortis as "a quantum leap in asset management and private banking," Prot added that Fortis' €209bn in assets under management (AuM) will drive BNP Paribas' AuM up to €550bn, making the bank the fifth largest asset manager in Europe, pushed up from tenth place.

"This is one of the attractive components of the transaction," concluded Prot about the deal which saw the Fortis Group name disappear from banking this morning.

The Dutch government's €16.8bn acquisition of the Fortis' Dutch operations Fortis Bank Nederland, ABN Amro and Fortis Verzekeringen Nederland, on Friday sparked an angry war of words between the Netherlands and Belgium over the rescue plan and a weekend of speculation about the bancassurer's future.

Subsequently, Fortis announced this morning the Belgian government had acquired the remaining share of 50% plus one share of Fortis Bank SA/NV for €4.7bn in cash, transferring a majority interest to BNP Paribas.

A portfolio of the most impaired structured products with fair value of €10.4bn is ring-fenced by Fortis Bank to a separate management entity jointly-owned by the Fortis Group (66%), the Belgian state (25%), and BNP Paribas (10%).

The Belgian government has reached an agreement with BNP Paribas on the subsequent transfer of 75% of Fortis Bank SA/NV; the Belgian State will continue to own the remaining 25% of the company.

BNP Paribas will acquire 100% of Fortis Insurance Belgium for a total consideration of €5.73bn in cash, subject to final closing adjustment.

The business acquired consists of Fortis' insurance business in Belgium, almost 1,500 branches internationally excluding the Dutch branches - which are now owned by the Dutch government - along with Fortis investments' management activities, including the former ABN Amro Asset Management, Fortis' private banking business, and the merchant banking and consumer finance business outside the Netherlands.

Fortis said this morning €12.8bn received for the Dutch banking activities, including ABN Amro, will remain within Fortis Bank.

Media reports last month suggested BNP Paribas had pulled out of negotiations because of disagreement over the price and guarantees.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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