Credit Agricole buys rest of Indosuez for pounds 641m

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The Independent Online
The uncertain future of Banque Indosuez was finally settled over the weekend when Credit Agricole bought out the 49 per cent stake it did not already own in the debt-laden French bank for FFr5.6bn (pounds 641m).

Credit Agricole intends to merge Indosuez with its own businesses in investment banking, trading and asset management and unite branch net- works in the US, UK and Hong Kong.

Combined with Indosuez, Credit Agricole will manage assets worth more than FFr650bn.

Credit Agricole bought a 51 per cent stake in Indosuez last July and Suez had originally intended to dispose of the remaining shares in two tranches - one next year and another after 2000.

"For us, it now means of course that we are getting the money more quickly," said a Suez official. "For Credit Agricole it now will be easier to restructure Indosuez because they own all of it."

Suez is being relieved of FFr4bn of debt by selling Indosuez and will hope for a return to profitability after reporting a net loss of FFr3.96bn last year. It said it would make a capital gain of FFr300m from the sale.

The deal, which is effective from today, means Credit Agricole has paid a total of FFr11.9bn for Indosuez, having bought the 51 per cent stake for FFr6.3bn.

The price was reached from financial statements dated 30 June which valued Indosuez at FFr11.79bn and also from the interest on the balance of the purchase price between 1 July and today.

Indosuez should be in the black this year after making a net profit of FFr107m in 1995 on the back of one-off gains. Two years ago Indosuez reported a FFr1.09bn loss.

Suez was created in 1858 to excavate the Suez Canal in Egypt. Banque Indosuez was formed in the 1970s by the merger of Banque de Suez and Bank de l'Indochine.

Suez set up Banque de Suez in 1958 when the Egyptian government took control of the Suez Canal while Bank de l'Indochine was a French bank active in South-east Asia.