In December 2002, the French bank Crédit Agricole made a takeover bid for Crédit Lyonnais, which the latter's board has accepted. Crédit Agricole was forced to act quickly and pay more than anticipated because of interest in taking over Crédit Lyonnais by another French bank, BNP Paribas. Trade unions fear that the result will be a major restructuring programme with heavy job losses.
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In December 2002, the French bank Crédit Agricole made a takeover bid for Crédit Lyonnais, which the latter's board has accepted. Crédit Agricole was forced to act quickly and pay more than anticipated because of interest in taking over Crédit Lyonnais by another French bank, BNP Paribas. Trade unions fear that the result will be a major restructuring programme with heavy job losses.
During November and December 2002, following the announcement of the sale of the French state’s holding in the capital of the Crédit Lyonnais bank, BNP Paribas bought up these shares and managed to acquire others in the marketplace, thus putting itself in the position to make a takeover bid for Crédit Lyonnais. While discussions on a closer relationship between Crédit Lyonnais and another bank, Crédit Agricole, have been ongoing since 1999 (FR9903169N), without the two sides having reached an agreement, this increase in BNP Paribas’s holding in Crédit Lyonnais noticeably raised the level of tension and helped accelerate events. The management of Crédit Lyonnais preferred to do business with Crédit Agricole and opposed any rapprochement with BNP Paribas. On 16 December 2002, Crédit Agricole made a takeover bid for Crédit Lyonnais.
Crédit Agricole’s planned takeover of Crédit Lyonnais comes as no surprise in the financial services sector, as the alliance of these two banks seemed to have been on the cards for some time. Yet the particular way in which the takeover bid occurred, forcing Crédit Agricole immediately to buy a sizeable share of the capital when it had hoped to increase its holding steadily, has significant consequences for the future, in that the cost of the takeover to Crédit Agricole will be higher than expected. Thus, restructuring is supposed to compensate for this high buy-out price in order to satisfy shareholders.
On the industrial relations front, the packages put forward by the two bidders to take over Crédit Lyonnais are clearly different. The organisational similarities between Crédit Lyonnais and BNP Paribas, both in terms of networks and areas of activity, seemed to suggest more job losses: a study commissioned from a consultancy by the General Confederation of Labour (Confédération générale du travail, CGT) found that 6,000 jobs would have to be cut over 15 years in order to cover the cost of acquiring half the company’s capital at EUR 58 per share. However, the unions were not necessarily willing to embrace Crédit Agricole. Its bid provides for 4,600 jobs to go over a three-year period, both in France and abroad, with the finance and investment arm of the bank to undergo the most stringent restructuring, particularly in its foreign branches. The Crédit Lyonnais and Crédit Agricole networks should remain formally independent and relatively untouched in so far as their geographical location and client groups complement each other rather than overlap. Crédit Lyonnais could become a subsidiary.
The trade unions at Crédit Lyonnais - CGT, the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the French Christian Workers' Confederation (Confédération française des travailleurs chrétiens, CFTC), the General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) and the National Banking Union (Syndicat national des banques, SNB) affiliated to the French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC) - have an inter-union alliance. The alliance, which had stood firm on the issue of the takeover of the company by another bank, split at the Crédit Lyonnais board meeting on 16 December 2002 which voted on the two banks joining forces. Two employee representative board members abstained, while the SNB representative voted in favour of the plan, along with most other board members. CGT stated that pay should be the basis of future negotiations, while CFDT commented that 'pay is not a tool that can be used in trade-offs'.
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Eurofound (2003), Crédit Agricole to take over Crédit Lyonnais, article.
