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Fortis to pay out pounds 850m for bank

MeesPierson, the world's oldest merchant bank, was bought yesterday for 2.5bn guilders (pounds 850m) by Fortis, the Belgian and Dutch-owned insurance and banking group.

Founded in 1720 in Rotterdam as Mees and Zoonen, MeesPierson is being sold by the giant Dutch bank ABN Amro, which owns Hoare Govett, the London securities house.

Hoare Govett is not affected by the deal, which represents one of the largest acquisitions in the history of the Netherlands. The release of capital tied up in the MeesPierson business frees ABN Amro to concentrate on expansion elsewhere.

Earlier this year it offered more than pounds 1bn for Standard Federal Bancorporation, one of the largest savings banks in the US Mid-west.

This was the culmination of a series of acquisitions across the Atlantic, including three others this year, which have confirmed its position as the biggest foreign bank operating in the US.

MeesPierson has less than a tenth of its business in the UK, but is a big operator in the Dutch corporate finance, fund management and private banking markets.

The acquisition will make Fortis one of the three biggest financial services groups in the Benelux countries and the fourth-largest Dutch bank. Total assets under management will be pounds 80bn.

Fortis said the acquisition would make a positive contribution to Fortis' earnings per share from 1997. The group will partially finance the acquisition by a rights issue early next year and the rest will be from bond issues and internal resources.

The two parent companies of the group, Fortis AG of Belgium and Fortis Amev in the Netherlands, will contribute equal amounts in cash.

Dennis Ederzeel, a banking analyst at Delta Lloyd Bank, said: "If you look at recent prices for takeovers, that's not an exaggerated amount." The price includes this year's profits and the goodwill payment is about 500m guilders.