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Fortis to sell stake in ABN Amro

Sale includes bank's international diamond and jewelry division

September 29, 2008

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Amsterdam, Netherlands—The governments of three separate countries have agreed to bail out struggling bank Fortis NV, as long as it sells its stake in ABN Amro, The Associated Press reports.

The sale would include ABN Amro's international diamond and jewelry division, the world's biggest financier of the global diamond trade.

Fortis said the sale of its stake in ABN Amro, which it acquired one year ago, could possibly bring less than its acquisition price of 24 billion euro (about $35 billion).

The AP reports that the governments of Belgium, the Netherlands and Luxembourg agreed to the 11.2 billion euro ($16.4 billion) bailout package on Sunday to avert a run on Fortis.

In addition to demanding that Fortis resell the share of ABM Amro it bought a year ago, the deal also gives the governments a 49 percent stake in exchange and forces Fortis Chairman Maurice Lippens to resign.

Fortis, with headquarters in Brussels, Belgium, and in Utrecht, Netherlands, is Belgium's largest retail bank, and ABN Amro is the largest in the Netherlands.

According to the AP, Fortis' participation in the three-bank consortium led by Royal Bank of Scotland PLC to acquire ABN Amro in a 70 billion euro ($102.5 billion) deal was the bank's "nearly fatal misstep."

Fortis Chief Executive Officer Filip Dierckx, who spoke at a press conference on Monday in Brussels, acknowledged as much.

"If you look at some of the decisions that were taken in the past, then you can say that probably they were done at the wrong moment," he said. "If you want me to say that some of the decisions were not the best, I will indeed confirm that."

According to the AP, Dierckx declined to set a deadline for the ABN Amro stake sale and declined to comment on speculation that ING Groep NV will be the buyer.
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