Post by pieter on Oct 4, 2008 12:40:23 GMT -7
Dutch government nationalizes Fortis' operations in the Netherlands
By Nelson D. Schwartz
Published: October 3, 2008
PARIS: In another sign of deepening European government efforts to address the credit crisis, the Dutch government Friday took over the operations in the Netherlands of Fortis Bank, the troubled Belgian-Dutch lender.
The €16.8 billion, or $23.3 billion, deal, approved by the Dutch central bank, comes less than a week after the government of the Netherlands, along with Belgium and Luxembourg, had agreed to invest €11.2 billion in Fortis.
The Dutch finance minister, Wouter Bos, said the new deal replaced the rescue package by the three countries last Sunday.
Last year, Fortis acquired the Dutch retail operations of ABN AMRO, and the government's action is intended to reassure local depositors who are nervous about the safety of their accounts amid what is now a global credit crisis.
The move came one day before President Nicolas Sarkozy of France was to host a gathering of European leaders in Paris in an effort to formulate a coordinated response to the credit crisis, which has already led Germany, France, Britain, Iceland and Ireland to shore up lenders in their countries.
This past week, Belgium and France provided Dexia with €6.4 billion, while the British authorities took over Bradford & Bingley, and the Irish government extended its guarantee on deposits in its banks.
In a statement, the Belgian government said: "Fortis Group has sold to the Dutch government most of the Dutch activities of the group, and more specifically Fortis Bank Nederland Holding NV, including ABN AMRO, and Fortis Insurance Netherlands NV."
Some observers had speculated that the Dutch giant ING or BNP Paribas of France might buy Fortis. But without an offer forthcoming, the Dutch government stepped in with the outright takeover bid.
The move underscores how quickly European banks have been hit by worries following the collapse of Lehman Brothers last month in the United States and the effective nationalizations of Fannie Mae, Freddie Mac and the insurer American International Group by the U.S. government.
Fortis, along with Banco Santander of Spain and Royal Bank of Scotland, swallowed up ABN AMRO last year in a deal for more than €70 billion.
Santander picked up ABN AMRO's Italian and Brazilian units, while RBS acquired ABN's wholesale and investment banking businesses. But the deal left Fortis overstretched, as the credit crisis gathered momentum and investors fled bank stocks.
The Dutch government indicated Friday that it planned to eventually return the Fortis assets to private hands when market conditions improve.
By Nelson D. Schwartz
Published: October 3, 2008
PARIS: In another sign of deepening European government efforts to address the credit crisis, the Dutch government Friday took over the operations in the Netherlands of Fortis Bank, the troubled Belgian-Dutch lender.
The €16.8 billion, or $23.3 billion, deal, approved by the Dutch central bank, comes less than a week after the government of the Netherlands, along with Belgium and Luxembourg, had agreed to invest €11.2 billion in Fortis.
The Dutch finance minister, Wouter Bos, said the new deal replaced the rescue package by the three countries last Sunday.
Last year, Fortis acquired the Dutch retail operations of ABN AMRO, and the government's action is intended to reassure local depositors who are nervous about the safety of their accounts amid what is now a global credit crisis.
The move came one day before President Nicolas Sarkozy of France was to host a gathering of European leaders in Paris in an effort to formulate a coordinated response to the credit crisis, which has already led Germany, France, Britain, Iceland and Ireland to shore up lenders in their countries.
This past week, Belgium and France provided Dexia with €6.4 billion, while the British authorities took over Bradford & Bingley, and the Irish government extended its guarantee on deposits in its banks.
In a statement, the Belgian government said: "Fortis Group has sold to the Dutch government most of the Dutch activities of the group, and more specifically Fortis Bank Nederland Holding NV, including ABN AMRO, and Fortis Insurance Netherlands NV."
Some observers had speculated that the Dutch giant ING or BNP Paribas of France might buy Fortis. But without an offer forthcoming, the Dutch government stepped in with the outright takeover bid.
The move underscores how quickly European banks have been hit by worries following the collapse of Lehman Brothers last month in the United States and the effective nationalizations of Fannie Mae, Freddie Mac and the insurer American International Group by the U.S. government.
Fortis, along with Banco Santander of Spain and Royal Bank of Scotland, swallowed up ABN AMRO last year in a deal for more than €70 billion.
Santander picked up ABN AMRO's Italian and Brazilian units, while RBS acquired ABN's wholesale and investment banking businesses. But the deal left Fortis overstretched, as the credit crisis gathered momentum and investors fled bank stocks.
The Dutch government indicated Friday that it planned to eventually return the Fortis assets to private hands when market conditions improve.
