Milan: Credit Agricole SA agreed to acquire as many as 200 branches from Intesa Sanpaolo SpA, while cutting its stake in the Italian lender to comply with a request from Italy's competition regulator.
Credit Agricole, France's largest retail bank, will buy 150 to 200 Italian outlets from Intesa for an undisclosed price, bringing its total branches in Italy to more than 900, the Paris-based bank said on Thursday in an emailed statement.
The French bank also agreed to cut its stake in Milan-based Intesa to below 5 per cent by year-end. By July 2011, Credit Agricole must either lower the holding to less than 2 per cent or have its voting rights frozen at that level. It currently owns 6 per cent, according to Intesa's website.
"It's a complex agreement, but it's a positive agreement," Credit Agricole Chief Executive Officer Georges Pauget said on a conference call.
Credit Agricole will name a "monitoring trustee," which will manage the stake until the sale is completed, Italy's competition watchdog said in a separate statement. The trustee will name an independent member of Intesa's board.
Credit Agricole's move is part of a plan with Intesa to avoid a fine for the Milan-based bank and limit a potential writedown on its own holding. The watchdog ruled that Credit Agricole's role in Italy's second-biggest bank by assets violates competition rules and breaches conditions it set when the bank was formed by the merger of Banca Intesa SpA and Sanpaolo IMI SpA.
The conditions set by the watchdog in 2006 called for Credit Agricole to reduce its stake in the new lender to below 2 per cent. The regulator also said the French bank must not play an "administrative or management role in Intesa."
Credit Agricole agreed last week to dissolve a shareholder pact with Assicurazioni Generali to comply with a request from the Italian regulator.
