SocGen weighs alliance with rival BNP, says report

Our Banking Bureau
08 June 2007

Daniel Bouton, head of SocGen, had asked two investment banks to advise on a tie-up with BNP that could create a combined entity dominating the market in France by market value and standing third in Europe as a whole, Les Echos said

While a deal could shield SocGen from any unsolicited takeover bid by other European suitors, it would affect thousands of jobs due to the overlapping branch networks of the two lenders, making it politically controversial.

It would also speed up consolidation in Europe''s banking industry.

The move comes just weeks after Italy''s UniCredit moved to merge with domestic rival Capitalia and Dutch ABN AMRO agreed a deal with Barclays inviting a rival offer by a consortium of Royal Bank of Scotland, Fortis and Santander.

A Societe Generale spokesperson refused to comment on "rumours", adding a major operation was "neither necessary nor urgent" for the bank.

BNP had made a failed takeover attempt on SocGen in 1999, after which it managed to absorb Paribas.