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UPDATE 2-EU's Kroes: Premature to judge Fortis/ABN remedy

Published 09/22/2009, 11:27 AM
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* Says competition in the Netherlands has to be ensured

* State is seeking alternatives to ABN asset sale remedy

* FinMin: do not fear any Deutsche Bank legal claims - TV (Updates with FinMin comments)

By Gilbert Kreijger and Ben Berkowitz

AMSTERDAM, Sept 22 (Reuters) - The EU's antitrust chief said it was premature to judge whether a Dutch state sale of Fortis Bank Nederland assets would satisfy its competition requirements and allow two nationalised banks to merge.

The Dutch state is under orders to sell some ABN AMRO assets before it can merge the bank with Fortis Bank Nederland. The finance ministry has broached the idea of selling some Fortis assets instead, though.

Last week, Deutsche Bank backed out of talks to buy assets from ABN AMRO. The news threw a huge roadblock in the Dutch government's plans for ABN AMRO, which it bought last October in a 16.8 billion euro ($24.6 billion) deal.

European Competition Commissioner Neelie Kroes said on Tuesday she could not yet say whether selling some Fortis assets would be a sufficient replacement for the ABN assets.

"It is premature to answer that question. We have to make sure there is fair competition in the Netherlands," Kroes told reporters outside the Amsterdam stock exchange.

The European Commission is tasked with ensuring fair play in the 27-country European Union. Kroes's comments came amid signs the Commission is intervening heavily in deals involving banks that have taken state aid.

The European Commission is threatening to break up Britain's Lloyds Banking Group and force asset sales and limit dominant market positions at Royal Bank of Scotland and other European lenders who took help.

CHANGE OF PLANS

The state's original plan was to sell ABN AMRO assets to Deutsche Bank, merge it with Fortis Bank Nederland and take the combined group public.

After nationalisation, the government sought to renegotiate the deal since the agreed sale would have generated about 300 million euros in losses.

The finance ministry said Monday it was working under an Oct. 2 deadline from the EU to come up with a new remedy plan.

But in his weekly television interview on RTL Z, Finance Minister Wouter Bos said he was not afraid of any legal claims from Deutsche Bank related to the failed deal.

"No, I am not afraid of this. The latest bid on the table was enough for us to continue but not for the Germans. We were not the ones that quit, the Germans did," Bos said.

Sources close to the negotiations have told Reuters that the deal fell apart after Deutsche Bank agreed to terms and the finance ministry subsequently asked for new concessions.

Those sources have also indicated that Deutsche Bank remains interested in the assets it was poised to buy, though it is not clear if the finance ministry would re-open negotiations.

(Reporting by Gilbert Kreijger; Writing by Ben Berkowitz; Editing by Dan Lalor and Elaine Hardcastle) ($1 = 0.6827 euro)

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