(Update adds details on impact for Banco Popolare)
PARIS (Thomson Financial) - Credit Agricole and Banco Popolare said they
reached agreement on creating a consumer credit joint venture in Italy, with
Credit Agricole holding 61 percent and Banco Popolare holding 39 percent.
The pact calls for Credit Agricole's consumer credit unit, Agos, to acquire
Banco Popolare's consumer credit unit, Ducato, for 1 billion euros, as Ducato
launches a 130 million euro capital hike to be subscribed by Banco Popolare.
Agos will launch its own capital hike of 1 billion euros, also to be
subscribed by Banco Popolare, allowing Banco Popolare to achieve its 39 percent
holding in the joint venture.
Credit Agricole will pay Banco Popolare a dividend of 30.5 million euros as
part of the agreement.
The venture will be Italy's largest consumer credit company with a 14
percent market share.
Under the deal, Credit Agricole will control the joint venture but Banco
Popolare will have a right of veto for certain decisions and will be able to
call for it to be listed in the medium term.
The operation will generate for Banco Popolare a net capital gain of about
120 million euros and a reduction in goodwill booked on the balance sheet of
over 630 million euros.
As a result Banco Popolare's Tier 1 ratio will increase by 70 basis points
and its core Tier 1 by 50 basis points compared to the values seen at the end of
2007.
michael.strauss@thomsonreuters.com; stephen.jewkes@thomsonreuters.com
mjs/vs/mjs/ak/sj/sal
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