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| Computer Translations Übersetzungen Traductions Traduzioni
Traducciones Traduções Oversettelse
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| Date |
22/06/1999 |
| Companies
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BANCO COMERCIAL PORTUGUES - BANCO SANTANDER CENTRAL HISPANO - |
| Subject
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EU Commission intervenes in Munidal Confianca acquisition decisions |
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Brussels off the record briefings say the EU Commission is set to intervene in the case of the Portuguese government who prevented the acquisition of a 40% stake in Mundial Confianca by Banco Santander and Central Hispano. Governments should not discriminate between their own institutions and those of other EU members under EU regulations. Most Central Banks and governments have held to the principle that they can decide which mergers and acquisitions will be allowed amongst banks they regulate. Officially though, these powers are restricted to intervention for 'prudential' reasons.
Intervening in this dispute is highly significant to the Portuguese and Spanish markets however has major implications for the rest of the EU, not least France.
The rejection of the BSCH bid by the Portuguese Ministry of Finance was quickly followed by a counter offer for 100% of Mundial Confianca by BCP.
The choice of case to contest would appear to be a confession of its own perceived weakness. The EU Commission did not make any public comment when Dominique Strauss-Kahn, French Finance Minister, instructed Societe Generale that it was not to seek foreign shareholding in order to block the hostile bid from BNP. One of a number of recent French government and central Bank decisions set to influence the shape of the European banking sector in the short to medium term. This compares to the Mundial case who are an insurer, with controlling interests only, in the three banks under question. The three banks control an insignificant part of the European banking market.
Equally, the EU commission not only did not object but actually approved the French government reflotation plans for Credit Lyonnais. The French Government has awarded options of 10.5% in Credit Lyonnais to foreign owned banks, however has ensured the remaining two thirds of the institutional equity is in French hands in its extremely complex flotation plans following its E150bn bail out of the failed bank (admittedly a further 6% is in the hands of AGF, 51% owned by Allianz though still on the Paris Bourse). Few believed the complexity of the flotation plan was anything other than a reflection of the French determination to keep the refloated bank in French hands for the forseeable future.
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