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Saturday, August 14, 1999 Published at 15:38 GMT 16:38 UK

Business: The Company File

BNP success in banking battle

BNP: Looking to dominant French banking industry

The French bank, Banque Nationale de Paris has won a majority stake in a rival bank, Paribas.

But it failed to get a majority stake in another bank, foiling its three-way merger effort.

The French stock market regulator said that the BNP will hold 65% of Paribas and almost 37% in another leading bank, Societe Generale.

The official announcement was not expected until next week, but a series of leaks in the French media appear to prompted the Council of Financial Markets to advance the release of the figures.

BNP's failure to get more than 50% of Societe Generale means that, for the time being, the attempt to create the world's largest bank in terms of assets has failed.

Long takeover battle

[ image: Markets closely following events]
Markets closely following events
The battle for control of the French banking industry has been France's largest takeover banking bid.

BNP launched a hostile takeover bid for Societe Generale and Paribas five months ago, shortly after the latter two banks announced plans for a merger.

The two banks are largely complementary, with Paribas specialising in investment banking and Societe Generale in the retail sector.

Attention was now expected to shift to the national bank regulator which will have to decide what happens next.

BNP has said that it would go ahead with a two-way merger with just Paribas if it did not win control of both banks.

This would leave Societe Generale out on a limb and ripe for being taken over by another bank.

The French Government had said that it will be watching closely developments in the banking industry to ensure that any outcome is in the national interest.

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