Yesterday, on the day negotiations between the parties were set to expire, Fortis Holding (Fortis SA/NV and Fortis N.V.) announced a revised agreement with France's BNP Paribas (BNP) and the Belgian government with respect to the proposed sale of certain Fortis operations. The revised agreement, which is subject to the approval of Fortis SA/NV and Fortis N.V. shareholders at an April 2009 shareholder's meeting, will be detailed in a new shareholder's circular to be published by Fortis Holding in the near term. A summary of the main elements of the agreement, several which differ substantially than the previous deal terms rejected by Fortis SA/NV shareholders last month, are as follows.

  • Fortis Insurance Belgium - Fortis Holding will sell 25% of the shares in Fortis Insurance Belgium to Fortis Bank SA/NV for €1.375 billion. Fortis Holding and BNP also "agreed to explore broader cooperation with respect to insurance activities, whereby Fortis Holding will become BNP's preferred commercial partner for non-life insurance products." BNP and Fortis Holding will also enter into a shareholder's agreement giving Fortis Bank SA/NV representation on the Board of Directors of Fortis Insurance. Various sources have further reported that the financing for the sale will be guaranteed by BNP. Under the previous deal, BNP was to purchase 10% of Fortis Insurance Belgium for €550 million in cash.
  • Fortis Bank SA/NV - The proposal to sell 74.9% of Fortis Bank SA/NV to BNP was not specifically mentioned, however it appears that proposal is still on the table as the announcement states that "Fortis Holding will continue to have the benefit of a call option" granted by the Belgian government "linked to the BNP shares acquired by the Belgian government" (in exchange for a percentage of Fortis Bank SA/NV). Under the new agreement, Fortis Holding will also have certain anti-dilution rights "aim[ed] at preserving the value of the option."
  • Structured Credit Portfolio - Under the new agreement, a special purpose vehicle (SPV) will purchase a selected structured credit portfolio from Fortis Bank valued at approximately €11.4 billion, rather than the previously agreed €10.4 billion. To finance the SPV, Fortis Holding will provide €760 million in equity, BNP will provide €200 million in equity and the Belgian government will provide €740 million in equity, with the remainder of the funding provided by way of debt financing from BNP and Fortis Bank, partially guaranteed by the Belgian government. The Fortis announcement did not provide any other specific details with respect to each parties provision of debt, the resulting Belgian government guarantees, or the approximate SPV ownership percentages of the parties following the financing.

Fortis Bank CEO Karel De Boeck stated that "[w]ith a new agreement on the table, subject to shareholders’ approval, it is now the right time to look forward and to seize the opportunity we have to build for the future."