Troubled Fortis partially nationalised

Monday 29 September 2008

The Dutch, Belgian and Luxembourg governments have agreed to put a total of €11.2bn into Fortis to rescue the financial services group. Fortis has also agreed to sell parts of ABN Amro which it bought last year.

The agreement to partially nationalise Fortis was reached after a weekend of crisis talks which included the Dutch and Belgian finance ministers and central bank chiefs, and European central bank president Jean Claude Trichet.

Each government will take a 49% stake in Fortis in their respective countries. The Netherlands is paying €4bn for its stake, Belgium €4.7bn and Luxembourg €2.5bn.

‘We could have not intervened, but the question was whether Fortis would have survived on Monday,’ Reuters quoted Dutch finance minister Wouter Bos as saying.

News agencies report that both Dutch bank ING and France’s BNP Paribas were interested in Fortis but both pulled out.

No buyer has yet been found for ABN Amro but ING is being tipped as a possible candidate.

New Fortis CEO Filip Dierckx gave the press an insight into the talks when he was photographed carrying a document which included a range of options such as ‘Fortis sells its stake in ABN Amro for x billion euros to xx’ and ‘governments of Belgium and Luxembourg to invest xx billion euros in Fortis.’

Fortis’ shares dropped by over 30% last week and are down over 70% since the beginning of the year. The group's troubles stem from last year’s takeover of ABN Amro. Fortis paid €24bn for its stake in the group.

For the Fortis press release, click here

Should Fortis be partially nationalised? To take part in our poll, click here

For brief history of Fortis, see Dictionary of Dutchness

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