Societe Generale Sells 2.05 Percent Stake in Euroclear

Societe Generale Sells 2.05 Percent Stake in Euroclear

Societe Generale announced on Friday that it has sold a part of its stake in settlement services provider Euroclear.

A statement released by the French investment bank indicates that it has sold 2.05 percent of Euroclear to SFPI-FPIM – a holding and investment company owned by the Belgian government.

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Societe Generale did not disclose the terms of the deal in its announcement. We can, however, get some idea of the value of the sale based on documents released earlier this week.

In a summary of its third quarter results for 2018 released on Thursday, the company said that it had revalued its holdings in Euroclear to €271 million ($307 million).

According to Reuters, the company still has a more than 5 percent stake in Euroclear – even taking into account Friday’s sale to SFPI-FPIM.

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No impact on tier 1 core capital for Societe Generale

In typical corp-speak, Societe Generale said on Friday that the deal was:

“The consequence of the mechanical increase of the Group holding induced by the successive share buy-backs implemented by Euroclear over the past years.”

There is unlikely to be any further hold up to the deal as it already has the regulator’s seal of approval. Societe Generale stated that all authorisations necessary to close the transaction had been obtained.

Though the sale is likely to generate the investment bank a huge amount of cash, it is unlikely to have an impact on its Tier 1 core equity.

In its statement, Societe Generale said that it, as it had already performed a revaluation of its Euroclear holdings in the third quarter of this year, the impact of the sale on Tier 1 core equity will be limited.

Finance Magnates reached out to Societe Generale for comment on this article but, at the time of publishing, no response was forthcoming.

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