BNP seeks to acquire Société Générale and Paribas
In March 1999, BNP made acquisition bids through an exchange of shares for two other French banks, Société Générale and Paribas, which themselves had announced a merger the previous month. The BNP bids provoked criticism from the other two banks in question, while trade union organisations in the three banks took rather different positions on the proposals.
In January 1999, the French banks Société Générale and Paribas announced a merger, taking the form of a security swap from 1 February (FR9902160N). Subsequently, the BNP bank made acquisition bids, through an exchange of shares, for both Société Générale and Paribas, on 9 March. These bids were unsolicited and, although ostensibly friendly, were criticised by the other two banks in question
Closer links between BNP and another bank, Crédit Lyonnais, had been spoken of in mid-February, as part of the imminent privatisation of Crédit Lyonnais. At that time, BNP put forward an "organisation plan" (projet industriel) and committed itself to guaranteeing the jobs of Crédit Lyonnais's 30,000 employees. Now, BNP has gone back to its longstanding strategy of alliance with Société Générale. The objective is the creation of a huge banking group, with several trading names, with as many as 4,700 branches (compared with Crédit Agricole's 8,800). The group resulting from the proposed mergers would be the largest bank in the world in terms of balance sheet total.
BNP president Michel Pébereau has committed himself to implementing an employment management policy to cover the entire proposed group, modelled on the BNP's existing policy. Mass redundancies in the French banking system have been ruled out from the start. The reduction of staff numbers will continue at the BNP's current rate of 2.5% to 3% per year, but with no redundancies.
At Société Générale, the five trade unions represented in the company (CFDT, CFTC, CGT, CGT-FO and CFE-CGC) published a joint press release indicating their hostility to this plan. According to the unions, the BNP's acquisition bid has no industrial or commercial logic to it, and is simply a response to the markets, which are expecting "savage restructuring" within the French retail banking system, for the sole benefit of shareholders. The unions feel that the merger's objective is to achieve economies of scale, and will consequently involve the axing of jobs. While the Société Générale-Paribas merger was based on obvious complementary qualities between a retail and an investment bank, that proposed by BNP aims to rationalise the banks' networks. Unions at Société Générale, backed up by CFDT's banking section and CGT's financial services section, have approached the authorities to ask them to "take the required initiatives, especially with regard to the role of the banking sector and employment".
At Paribas, the unions have been guarded in their response. The impression is that this proposed new deal will change very little, as Paribas is likely to be kept in its current state.
At BNP also, the unions are pursuing a wait-and-see policy. On the company's board, where unions are represented, CFDT voted against the acquisition bid, while CGT abstained. Doubts have been raised in some quarters over the industrial relevance of the plan, and its impact on jobs. CGT-FO has asked what the consequences of the restructuring will be for the data processing departments and in the trading rooms, pointing out, however, that the age structures of the workforces employed by BNP and Société Générale are relatively complementary. The CFTC section at Société Générale feels that the merger can only have a "devastating effect on jobs". The banking union affiliated to CFE-CGC, the Syndicat national des banques (SNB), is relatively confident of Mr Pébereau's ability to keep his employment promises.