EU extends Dutch govt deadline for Fortis sale

posted: 37 DAYS 17 HOURS AGO

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BRUSSELS -European Union regulators on Monday gave the Dutch government a 24-hour extension to an Oct. 19 deadline for selling off parts of bailed-out bank Fortis.

The Netherlands must now find a buyer Tuesday for banking units it took over when it nationalized the Dutch operations of Belgian-based Fortis last October. Talks on a euro709 million sale to Germany's Deutsche Bank collapsed last month.

The European Commission said it would give more time "in light of encouraging developments" to allow a preliminary agreement. Any further extension would only be granted to finalize a binding sale and purchase agreement, it said.

The Dutch government must offload Fortis' Hollandsche Bank Unie NV, two corporate client departments, 13 financial advice agencies and ABN Amro's IFN Finance BV, a factoring business that buys a company's right to collect accounts.

The Netherlands' government bought the Dutch operations of Fortis NV for euro16.8 billion in October 2008 as the bank faced collapse and could not raise money on frozen credit markets.

The purchase price included ABN Amro's main retail banking operations, which Fortis acquired for euro24 billion a year earlier as part of the largest takeover in banking history.

The European Commission originally called on Fortis in 2007 to divest ABN Amro's commercial banking activities as part of the takeover.

It said that decision was still valid and the Dutch government could not combine ABN Amro and Fortis local operations without selling off units that could harm competition by making the bank more powerful than rivals.

2009-10-19 17:01:14