French regulator approves La Poste's takeover of CNP Assurances

FILE PHOTO: The logo of French group La Poste is pictured in Toulouse, southern France, April 1, 2019. REUTERS/Regis Duvignau

PARIS (Reuters) - France’s market regulator has approved state-owned mail operator La Poste’s takeover of CNP Assurances in a bid to create a state-controlled bank and insurer focused on the country’s rural areas.

The AMF watchdog said on Tuesday it authorised state-owned investment firm Caisse des Depots et Consignations, or CDC, and the French government to transfer their 42% stake in CNP Assurances to La Poste’s banking arm La Banque Postale.

This will allow the French post office to diversify away from the shrinking mail business, while CNP Assurances will get access to its customers.

La Banque Postale already owned about 18 percent of CNP Assurances.

The French watchdog decided to waive a rule that forces a company owning 30% in a listed company to make a public offer for all the shares in that company given that both Banque Postale and CDC are 100% owned by the French government.

The merger between La Banque Postale and CNP is an attempt by the government to ensure access to banking and insurance services in rural areas at a time mainstream banks are shutting branches in the countryside.

Discontent with scarce public services was one of the reasons behind the yellow-vest movement that erupted in November last year, challenging President Emmanuel Macron’s government.

The deal will also give a lifeline to La Poste, one of the leading employers in the country with around 250,000 workers, according to its website.

Reporting by Inti Landauro and Gwenaelle Barzic. Editing by Jane Merriman