BNP-ABN deal could put old bank M&A ghosts to rest

LONDON, June 17 (Reuters Breakingviews) – The last time a rival bought ABN Amro (ABNd.AS), it blew up the European banking system. BNP Paribas (BNPP.PA) boss Jean-Laurent Bonnafé’s tilt at the 10 billion euro state-owned Dutch lender may revive those memories. A cheap stock and simpler logic argue for a second go.

Bonnafé’s 59 billion euro French bank has signalled to the Dutch government that it is interested in buying the bank in which the Hague owns a 56% stake, Reuters reported on Friday. ABN’s last set of buyers, which jointly purchased the lender for 70 billion euros in the runup to the 2008 financial crisis, ended up in misery. Royal Bank of Scotland, which led the consortium and picked up ABN’s wholesale business, needed government support. Banca Monte dei Paschi di Siena (BMPS.MI) got hold of ABN’s Italian assets after buying them from consortium member Banco Santander (SAN.MC), and remains a basket case to this day. Fortis, which overextended itself by swallowing ABN’s Dutch unit, was rescued by the Belgian state and quickly sold to BNP.

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