Mergers and Acquisitions - publié le 06/05/2013

Résumé du document

Since 2007 and the first financial crisis, most of the media have been talking about banks and financial subjects. The crisis is the consequence of subprime. Banks were exchanging these subprimes, also called toxic assets, between them that's why the crisis was spread at a global level. Most companies have faced bad results since 2007 and lot of them have disappeared from the industry. There were a lot of bankruptcies: Lehman Brothers was the most impressive one. Lots of companies were bought by healthier banks or saved by the government interventions. Since the beginning of the crisis, the function of governments in the industry is more important as they lend huge amount of money to the banks in order to avoid the bankruptcy of the whole bank system. This amount is count in hundreds billions of Euros or Dollars.

For 10 years, there were a lot of mergers and acquisitions; all these concentrations were due to an augmentation of competition and also to deregulation, innovation and the decreasing of middlemen. The two main reasons for banks to merge are keep their competitive positions and become a leader in a main region. This increase of competition leads to a higher difficulty for new entrants to establish because of the weight of former companies and national governments. Governments are more involved in the market. For example, in France, the government put in place OSEO which is a tool to help the economy to be more stable. Internet has a more important place in the banking system. It's a way to increase the activities and the efficiency of banks, to attract new consumers with fewer costs than before, and to offer more services. Its impact on the strategy is not insignificant.

Extraits

[...] Bank of America and Citigroup are the bigger banks. American banks are much bigger than European banks. There are in the USA most of leaders in the industry like Goldman Sachs, Morgan Stanley, JP Morgan Chase and Co . With the crisis, most banks have changed their activities: They try to focus on their main activities that is to say retail bank and limit their risky activity about speculations. Even if the part of these activities are quite similar in their results was a disastrous year for the banking system: there were big losses everywhere in the financial place alongwith credit crisis which weaken banks. [...]

[...] THE PROCESS AND RESULTS OF THE ACQUISITION THE PROCESS THE EXPECTATIONS OF THE STAKEHOLDERS IS THAT A GOOD ACQUISITION OR NOT? BIBLIOGRAPHY Executive Summary In this final assignment we will analyze a merger & acquisition. I decided to take as example for my analyzis, the acquisition of Fortis (Belgium) by BNP Paribas (France) in 2009. I took this merger because the banking industry is very changing and uncertain as we saw with the financial and economical crisis that started in 2007. I also decided to work on this acquisition because it involves two different countries which is more interesting. [...]

[...] It's in these trends that the acquisition of Fortis took place, in a market that change very quickly The internal context Now that we understand the global sitatuation, especially in the global bank industry, we have to analyze the situation of the two companies; BNP Parisbas and Fortis, and then understand why BNP Paribas acquires Fortis in 2009. BNP Paribas BNP Paribas has three mains activities: retail banking, Corporate and investment banking and Investment Solution. The retail banking activities is the first activity of BNP Paribas, if we look as a historical point of view. It is the activity of account management, banking service, etc. This activity is made possible thanks to a huge network of 7,000 bank agencies all over the world (France, Italy, Belgium and emerging market. [...]

[...] First if we just look at the amount of the synergies that the BNP Paribas had created 402 millions euros of synergies at the end of 2011 while the prevision was, at the end of 2011, of 354 millions euros. In other word, the synergies at the end of 2011 are over the first expectations. There is an other clue that can show us that BNP Paribas consider that the acquisition of Fortis is a success is that BNP Paribas bought in June 2011 little bit more 2 years after the acquisition of Fortis) the ABN AMRO bank that Fortis sold just before the acquisition. [...]

[...] Insurance: includes all insurance activities of Fortis. It includes Insurance Belgium, Insurance Netherlands and Insurance International Luxembourg, France, Spain, Portugal, Germany, Thailand, Malaysia, China, India, Ukraine, Russia and Turkey) As we can see, the composition of Fortis holding company demonstrates its presence broadly international business whose heart is the banking and insurance. Whether privately or institutional The reasons of the acquisition Why BNP Paribas wants to acquire an other company? New Synergies The main reason for explain why BNP Paribas has approached Fortis , is the possibility offered to him by his counterpart north European to expand its business horizons. [...]