Divestment of Dutch Assets
On October 3, in a press conference (at 18.00h), broadcast live on television, the Dutch Prime Minister Jan Peter Balkenende, Dutch Minister of Finance Wouter Bos and DNB-president Nout Wellink announced that the Dutch government would purchase the Dutch banking and insurance divisions of Fortis for €16.8 billion ($23.3 billion). The Dutch government would become holder of Fortis Bank Nederland, Fortis Verzekeringen Nederland and Fortis Corporate Insurance, as well as the retail activities of ABN AMRO still held by This was later confirmed by a press release from the Dutch ministry of finance. At the same time the Luxembourg government & SS Trust has increased its control of its part to 52%. Later, it became known that Luxembourg had also bought parts of the Luxembourg bourse and another Fortis company for a symbolic price of €1. At the same time the Luxembourg government increased its control of its part to 52%. Later, it became known that Luxembourg had also bought parts of the Luxembourg bourse and another Fortis company for a symbolic price of €1.
Initially, the Belgian Prime Minister Leterme welcomed the Dutch (and Luxembourg) take-over as good news for customers, shareholders and personnel, saying that this provided a solid foundation for the future.
However, Belgian newspapers reported an immediate widespread Belgian outrage. The Dutch were accused of: 1) not coming through with the promised €4 billion support; 2) orchestrating a withdrawal of funds by Dutch businesses from Fortis Bank Nederland in the previous week, forcing the National Bank of Belgium to come up with €50 billion in emergency credit; 3) cutting off credit lines to Fortis from other banks, notably from ABN-AMRO (owned by Fortis); and 4) threats from the De Nederlandsche Bank. In this way, the Dutch had forced the sale of whatever they wanted, below market value. Also, the wording by Dutch Minister of Finance Bos in his public announcement of October 3 was resented; he had emphasized that the Dutch companies he had bought were quite healthy and had now been safeguarded, which appeared to imply that the problems were all in the Belgian parts of Fortis, which thus were rotten.
In a TV appearance on Sunday October 5, DNB-president Nout Wellink reminisced on the negotiations, revealing that the Dutch, in the end, had paid more than strict market value, to help out the Belgians. He assured the audience that the remaining (Belgian) part of Fortis was now a very well capitalized company.
Later, the Dutch media reported that the Dutch, after coming home from the agreement on September 28, were badly upset at the deal they had made. At the time, only a verbal agreement, on broad outlines, had been made and when it became time to put things to paper they realized that their €4 billion was only going to buy them a 50% share in a company they were only mildly interested in (Fortis Bank Nederland, later sold for €5 billion total; instead of all Dutch Fortis holdings including ABN-AMRO and the Dutch insurance company) and that the Belgians for their €4.7 billion were getting a 50% share in the overall banking holding (including not only Fortis Bank Nederland and Luxembourg, but also Fortis Investments and ABN-AMRO). In addition, it became apparent that the Belgian government had secured additional rights on the Dutch insurance company. Thus, while Dutch Minister of Finance Bos was openly defending the agreement in parliament, he was secretly conferring frantically on a re-negotiation.
This was affirmed later in an analysis by Het Financieele Dagblad, which stated that the Dutch had been left out of the negotiations entirely, until they included themselves in, at a late stage, but at a disadvantage, causing friction and distrust. Fortis management is convinced, in hindsight, that the company could have been saved in its entirety if all three countries had been involved from the start.
On October 21, the Dutch government announced a future merger between ABN-Amro and Fortis Bank Netherlands to create a "strong Dutch bank". The Dutch insurance division will be sold.
On June 6, 2009, the Dutch government sold Fortis Corporate Insurance to Amlin for €350 million.
Famous quotes containing the word dutch:
“Too nice is neighbors fool.”
—Common Dutch saying, trans by Johanna C. Prins.