Fortis breaks off two deals, makes a third

AMSTERDAM: Fortis NV announced a series of moves late Tuesday and early Wednesday that follow from the euro11.2 billion (US$16.4 billion) government bailout it received over the weekend to ward off insolvency.

First, Fortis said Ping An, China's second-largest insurer, had pulled out of a euro2.15 billion (US$3.39 billion) deal to buy a 50 percent stake in the Dutch-Belgian bank's asset management arm.

The company blamed ``current severe market disruption and the ongoing uncertainty in the global capital markets.''

Second, it said the Dutch central bank would not approve the sale of some ABN Amro assets in the Netherlands to Deutsche Bank AG, pending further review.

Deutsche Bank had agreed to buy the operations for euro709 million (US$1.1 billion), in what was widely considered a bargain given that they had earnings of euro140 million (US$221 million) in 2007.

Fortis had been ordered to sell the operations by the European Commission's antitrust regulator in order to gain approval for its euro24 billion (US$38 billion) acquisition of ABN Amro's Dutch operations last year.

However, as a condition of the bailout, Fortis must now resell ABN Amro anyway.

The Dutch central bank cited ``the exceptional circumstances on international financial markets, the uncertainty with regard to the future (owner of) ABN AMRO Bank and the implications of this uncertainty for all parties involved.''

And finally, Fortis said it would buy the 32.9 percent stake in UK investment firm Artemis Asset Management Limited it doesn't already own for euro397 million (US$557 million).

Fortis acquired its majority stake in Artemis via ABN Amro, which had a contractual obligation to buy out the remainder. Fortis did not say whether it now intends to dispose of Artemis, and spokespeople could not be reached for comment after the bank announced the deal after midnight local time.