The lives of many Credit Lyonnais employees may have been changed forever this weekend after the French government auctioned off its 10.9% stake in the bank to the highest bidder. BNP Paribas's successful $2.2bn bid looks set to start a takeover battle for Credit Lyonnais which will lead to further consolidation in the French banking industry.
Credit Agricole already owns 10.5% of Lyonnais and has long been regarded as the most likely merger partner. BNP Paribas's successful bid is clearly a signal of its intent to take full control of Lyonnais and a takeover battle certainly now looks on the cards. In theory, there is a stand-still agreement in place among the major shareholders until July, then BNP is free to act. But the bank may move even more quickly.
Other financial institutions which also have a shareholding interest in Credit Lyonnais include insurers Axa and Allianz, both of whom might be interested in a deal of some kind.
Credit Lyonnais had around 30,000 employees at the end of last year and a branch network of about 1,800.
A takeover for Lyonnais could also have profound implications for French rival Societe Generale. The loser in the tussle for Lyonnais may well turn its sights on SocGen in order to increase its own market share and remain up there with the Euro big boys.