BNP Paribas scoops up Fortis assets in credit crunch

By Sudip Kar-Gupta and Phil Blenkinsop

PARIS/BRUSSELS (Reuters) - BNP Paribas agreed to scoop up assets in Belgium and Luxembourg of banking and insurance group Fortis for 14.5 billion euros (11.2 billion pounds) to become the euro zone's biggest deposit bank.

The move followed a weekend of frantic talks with authorities in the two countries eager to stem a cash drain on Fortis and Belgian-French bank Dexia, which received a 6.4 billion-euro bailout last week.

BNP Paribas will buy control of Fortis's banking businesses in Belgium and Luxembourg for 9 billion euros, funded through 132.6 million new shares, it said in a statement on Monday.

The French bank, one of the least affected by the crisis in credit derivatives that has brought down rivals on both sides of the Atlantic, will also buy Fortis Insurance Belgium for 5.5 billion euros in cash, it said in a statement.

The combined bank will have deposits of around 600 billion euros, BNP said in slides on its Web site.

"It's a good deal for BNP Paribas. The price does not seem excessive," Agilis Gestion fund manager Arnaud Scarpaci said.

Shares in BNP Paribas were 3.5 percent lower at 68.86 euros by 9:50 a.m. British time but outperformed a 6.6 percent drop on the DJ Stoxx European bank index. Shares in Fortis were suspended.

BNP stock has fallen around 4 percent since the start of the year, compared to a 32 percent decline in the bank index.