BNP Paribas has acquired a package of approximately 9 percent in the share capital of Ageas from the Chinese group Fosun. Fosun is experiencing financial problems and has been looking for a buyer for its shares for some time. It now found it in BNP Paribas, which already owns a quarter of AG Insurance, the main insurance subsidiary of Ageas.
The entry of BNP Paribas into Ageas means a reunion between parties that were already involved during the financial crisis of 2008. Ageas, the former Fortis, had to be rescued during the financial crisis. The Belgian government then temporarily bought Fortis Bank, but then sold it to BNP Paribas. He turned it into the BNP Paribas Fortis bank.
Since the rescue operation, Ageas has evolved into a successful international insurer. It has interests in Europe and China. It was recently in the market to buy the British Direct Line, but Ageas ultimately shelved those plans.
Ageas’s shareholding has always been one of the more vulnerable sides of the group. The shares are very fragmented internationally, with the risk that the group falls into the ‘wrong’ hands. The few larger regular shareholders that Ageas had included mainly Chinese parties. Of these, only Fosun was left recently.
Long-term
BNP Paribas will pay around 730 million euros for a 9 percent stake. That amount is in line with the stock price. Ageas’s second largest shareholder is the Belgian government holding company FPIM, which owns approximately 6.4 percent. The government invested in Ageas’s capital at the beginning of 2022 to ensure that Ageas’s decision-making center would remain in Belgium. The Belgian government also has a 5.5 percent stake in BNP Paribas, but has never sought any influence there. The government is expected to sell those shares in the future.
BNP Paribas’s shareholding in Ageas appears to be structural. The French are now on board at Ageas at two levels and they work together on the sale of insurance products. It is unclear what the long-term implications are.
Ageas assesses the entry of the French major bank as positive. “Ageas is pleased to see that BNP Paribas recognizes the long-term value of the partnership and the future potential of the company with this investment,” it said. In any case, BNP Paribas’ entry into Ageas creates the bizarre situation where French major capital is now helping to anchor a Belgian group. In the past, Belgian companies that had come under French influence found that the decision-making center shifted to Paris.
Investing in Belgium
Bart De Smet, chairman of Ageas, says in a telephone response that BNP Paribas is a more stable shareholder than Fosun. According to De Smet, it is not expected that BNP Paribas will request seats on the board of directors. BNP Paribas already has two seats at Ageas subsidiary AG Insurance. For the French, commercial interests are located at that level.
“Our shareholding has always been very international. We want to ensure that our corporate culture and decision center with its high-quality management remain Belgian. We have a typical way of doing business that is different from the Anglo-Saxon world. That was one of the reasons for us not to push through with the takeover of the British Direct Line. That threatened to make our shareholding very Anglo-Saxon.”
With a 9 percent stake in Ageas, BNP Paribas has become an important shareholder, but its power at the shareholders’ meeting remains relatively limited. This is on the condition that the Belgian government holding company FPIM continues to hold 6.3 percent in Ageas. In the past, Belgium allowed many of its crown jewels to pass into foreign hands, but in recent years there has been a growing realization that this can also be detrimental to the economy. Ageas is important because, through the insurer AG Insurance, it is one of the major institutional players in Belgium that invests in the local economy. If the decision-making center were to disappear from our country, those (institutional) investments would also shift.
2024-04-14 14:11:59
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