FRANCE – Regulators have approved Credit Agricole's 16-billion euro offer for rival Credit Lyonnais.

France's Banking and Investment Companies Committee, the Comite des Etablissements de Credit et des Entreprises d'Investissement or CECEI, said in a statement that it has approved the offer, though it told the banks to close 85 branches and freeze branch openings in 32 parts of the country.

“Crédit Agricole and Crédit Lyonnais acknowledge the CECEI approval of their joint project,” the banks said in a joint statement. “This decision will now allow the two groups to launch the friendly takeover bid announced on December 16.”

“This project will create a leading European banking group, number one in retail banking in France,” they added. The France's market regulator the Commission des Operations de Bourse, or COB, must also approve the deal.

The banks says that they would have a combined 331 billion euros in assets under management and that the combined entity would be number one in the French bancassurance market and number two in the life insurance market. They would merge their asset management and specialised financial services platforms. They have targeted 10% of “cost synergies” in the asset management area.

The merger would mean the combined bank would have more than 20 million retail customers in France as well as a 15% combined market share of the employee savings market.

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