Thomson BankWatch Opinion on Société Générale and Paribas Merger
Société Générale (Socgen) and Paribas approved on January 31, 1999 a plan to unite their businesses. The new entity will be named SG Paribas and is expected to begin operations at the end of April 1999. Although the two banks will complete a full operational merger of their activities, both Société Générale and Paribas should remain separate legal entities. The new entity will have combined total loans of Euro 185 billion, total customer deposits of Euro 125 billion, total assets under management of Euro 220 billion and will become one of the five largest banks in Europe with total assets of Euro 679 billion. The proposed transaction will strengthen the newly formed bank’s investment banking operations thanks to an enhanced capital base and stronger market shares in chosen markets. It should also raise Socgen’s profile in specialized financial services, enhance its competitive position in corporate banking and further comfort its leadership in asset management operations.