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BNP Paribas buys out Belgian giant Fortis

BRUSSELS (Reuters) - BNP Paribas agreed with the governments of Belgium and Luxembourg yesterday to take control of the key remaining assets of troubled financial group Fortis, Belgian media reported.

RTBF radio and De Tijd newspaper's website said the French banking group would take 75 percent of Fortis Bank Belgium and 67 percent of Fortis Bank Luxembourg in a share swap with the two governments, which would get stakes in BNP Paribas.

The deal, which was not immediately confirmed by any of the parties, would be the most spectacular cross-border rescue since the US-born credit crisis swept into Europe last month, upending five banks and rattling savers' confidence. Belgian Prime Minister Yves Leterme was to hold a news conference after briefing his inner cabinet on the negotiations on Fortis, Belgium's biggest bank and biggest private sector employer, his office said.

The Belgian and Luxembourg governments would keep blocking minorities of 25 percent and 33 percent respectively in the Fortis banks in their countries, media reports said.

Tijd said the Belgian government would get a 10 percent stake in BNP Paribas, worth 6.5 billion euros at Friday's closing price, and Luxembourg would take 1.4 percent.

BNP Paribas would also take over Fortis Insurance Belgium and Fortis Investments, the wealth management arm of the group.

BNP Paribas had no immediate comment and there was no confirmation from either government.

During a second weekend of crisis talks, Leterme said he hoped to keep the Belgian and Luxembourg operations of the group together after the Dutch nationalised most of Fortis's Dutch units on Friday.

"The only thing certain is that we are going to send a clear and strong signal to the markets before they open tomorrow," he said.

An industry source close to the situation confirmed that BNP Paribas was negotiating to take a controlling stake in Fortis banks in both countries.

Belgium and Luxembourg took 49 percent stakes in the Fortis banks in their countries last Sunday in a rescue that lasted just five days.

Luxembourg Budget Minister Luc Frieden told RTL television the governments were close to a solution for Fortis involving one of Europe's most solid banks.