BNP Paribas deal for Fortis falls flat

French banking major BNP Paribas today said it would not proceed with the acquisition of a stake in beleaguered Belgium-based Fortis Banque as the Brussels court has suspended the transaction.

"Given the ruling by the Brussels Court of Appeal on December 12, 2008, the acquisition of a stake by BNP Paribas in Fortis Banque cannot proceed as initially planned," the company said in a statement.

As a result, the shareholders' meeting convened on December 19, 2008, will no longer take place, it added.

In a separate statement, Fortis said the ruling has suspended the 100 per cent stake sale of Fortis Insurance Belgium to BNP Paribas, which was expected to generate euro 5.7 billion, subject to certain conditions. Following this, Fortis would fully re consolidate Fortis Insurance Belgium temporarily, it stated. The court ruling also suspends the transfer of assets to a structured credit portfolio entity, of which Fortis would hold 66 per cent, the Belgian State 24 per cent and BNP Paribas 10 per cent.

Earlier in October, the French banking major BNP Paribas had said that it would acquire beleaguered Fortis' Belgium and Luxembourg operations as well as the international franchises for an estimated euro 14.5 billion.