he European Commission has cleared under the EU Merger Regulation the proposed acquisition by BNP Paribas of Fortis Commercial Finance Holding (“FCF”), a company specialised in factoring services in several EU member states. The examination of the transaction showed that the horizontal overlaps between the activities of BNP Paribas and FCF are limited and that, for all products and in all national markets concerned, the combined firm will continue to face several strong, effective competitors with significant market shares.
Factoring comprises the purchase of commercial receivables (i.e. invoices) from businesses, thereby providing them with added liquidity against their accounts payable.
The proposed transaction, notified to the Commission on 4 August, is in effect the repatriation of the Belgian assets of the Fortis factoring business, which came under the control of the Dutch State owing to the corporate structure of the Fortis group at the time of its separation, together with some operations of relatively limited scope in other Member States.
FCF is active in factoring services in a number of EU member states and some third countries, with a particular footprint in Belgium owing to having been part historically of the Fortis banking group. BNP Paribas, an international banking group headquartered in France, provides similar services in a number of member states , but has a negligible presence in Belgium where, prior to the transaction, it would generally refer that line of business to FCF under the terms of transitional arrangements agreed after the break-up of Fortis. .The Dutch assets of FCF are not part of the intended transaction and will be carved out to remain with their current owner, ABN Amro bank.
After examining the operation carefully, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA)1 or any substantial part of it and has therefore approved the concentration.
The proposed acquisition of FCF was also found to be in compliance with the undertakings assumed by BNP Paribas in the 2009 decision concerning the financial support granted by Belgium and Luxemburg to Fortis Bank.