Dutch govt buys Fortis Dutch activities

By Ingrid Melander and Niclas Mika

BRUSSELS/AMSTERDAM (Reuters) - The Dutch government nationalised the banking and insurance activities of Fortis (FOR.BR)(FOR.AS) in the Netherlands on Friday after the troubled financial services company hit an acute cash crunch.

Dutch Finance Minister Wouter Bos said the second state rescue of the Belgian-Dutch group in less than a week was made necessary by "increasing liquidity problems in the banking activities."

The transaction, effectively breaking up the cross-border group along national lines, is worth 16.8 billion euros (13 billion pounds) and includes Fortis' interest in ABN AMRO, the Dutch bank it bought in a consortium with Royal Bank of Scotland (RBS.L) and Banco Santander (SAN.MC) last year.

Belgian Prime Minister Yves Leterme said the decision was "aimed at maintaining the durable solvency" of Fortis, which the Belgian, Dutch and Luxembourg governments rescued last Sunday with an emergency 11.2 billion euro capital injection.

Leterme told the Belgian Senate on Thursday the country's banks were not yet out of the danger zone.

In a VRT television interview on Friday, he said Fortis' market capitalisation had fallen to less than 12 billion euros, and the government was watching the situation at Fortis and other Belgian banks "hour by hour."

The decision came on the eve of a Paris meeting of leaders of Europe's four major powers with the chiefs of the European Commission, the European Central Bank and euro zone finance ministers to discuss a response to the global financial crisis.

"Fortis Group has sold to the Dutch government most of the Dutch activities of the group, and more specifically Fortis Bank Nederland Holding NV, including ABN AMRO, and Fortis Insurance Netherlands NV," a Belgian statement said.