BNP Paribas abandons bid for Societe Generale

19 March 2008

Mumbai: BNP Paribas, France's biggest listed bank, has abandoned plans to acquire scandal-hit rival Societe Generale.

"Given the persistent rumors, BNP Paribas clarifies that it has ceased to consider a potential tie-up with Societe Generale," BNP said in a statement.

Societe Generale revealed $7.1 billion in losses in January, allegedly incurred while cleaning up operations of alleged ''rogue'' trader Jerome Kerviel.

Societe Generale said in January that trader Jerome Kerviel had amassed 50 billion euros in positions in stock index futures backed by fake hedges and false documents.

BNP also cited difficulties in a merger between the two banks, with the overlap in corporate and investment banking operations.

BNP's statement that a takeover of Societe Generale would not create shareholder value in the current market conditions has left SocGen investors in the lurch.