flandersfocus on THE DUTCH SPEAKING PART OF BELGIUM press review weekly, does not appear in July • number 9 • 25 February – 3 March 2006 KBC on the takeover trail INTRODUCTION ith the German company WE.ON’s bid for the Span- in Central Europe ish electricity producer Endesa and the announcement by the Italian company Enel that it would make an offer for the he major providers of combined And KBC also has concrete plans for French group Suez, a concen- tration wave appears to be T banking and insurance services, expansion in Serbia, Croatia and Roma- under way in the European energy sector. In a Fortis and KBC, have had an excellent nia. Here the Slovenian subsidiary NLB, defensive reflex, both Endesa and Suez have sought their salvation in national mergers. In Spain year. The Dutch/Belgian group Fortis, in which KBC has a 34% stake, is play- Endesa is joining forces with Gas Natural, and in which published its annual results ear- ing the role of bridgehead. KBC is also France Suez is doing the same with Gaz de France ly because a briefcase containing the aiming for a larger stake in NLB and – with the French government’s active support. After fierce criticism of the protectionist manoeu- results was stolen, increased its profit by wants to gain majority control of the vres, EC president Barroso wagged a warning fin- 32% to EUR 3.9 billion. KBC, the Flem- bank, be it in one or several steps. It is ger and promised that the competition rules would be complied with to the letter. ish fellow banker-cum-insurer, recorded having talks with the Slovenian govern- The Suez-GdF merger does indeed threaten com- a record profit last year of EUR 2.25 bil- ment on the matter (FF). petition in our country. Electrabel, the largest Bel- gian electricity producer became a wholly-owned lion. That is 39% up on the previous subsidiary of Suez last year, whilst the second, year. For that matter, Central Europe is MICHAEL SEPHIHA • DE TIJD • 3 MARCH much smaller producer, SPE, is half owned by Gaz increasingly becoming a second home de France. The new combination attains a market share of 90% of sold electricity, whilst on the gas market for KBC. In the Czech Republic In Serbia the Belgian group is targeting market Suez subsidiary Distrigas and Gaz de France and Hungary KBC is the second largest the pubic-sector insurer DDOR. The together account for 97%. That prompted de Tijd (2 March) to conclude that the Belgian govern- bank, and in Slovenia its subsidiary NLB privatisation of the second largest Ser- ment would have done better opting for the Enel is in fact the country’s largest bank. It bian insurance group was started at the camp, since the Enel-Suez combination had left more room for competition. also has a not insignificant market end of last year. The DDOR’s network Gerard Mestrallet, Suez CEO and new number one share in Poland and Slovakia. Last year has 94 branches. The Slovenian Nova in the Suez-GdF merger company, did his very best the Central European establishments Ljubljanska Banka (NLB) already con- to get the Belgian government on his side. He promised that the ‘pax electrica’ would not be already provided for 20% of the profit, trols the Continental Banka there. In touched. In this, Suez promised last year that it and next year that should rise to 25%. Montenegro NLB owns Euromarket would sell the unused Electrabel power stations, and would put a substantial volume of electricity Bank. And in neighbouring Bosnia it for sale on a Belgian stock exchange. He also let it CONTENTS already owns Tuzlanska Banka, CSB be understood that he could live with a reduction in Gaz de France’s Belgian gas interests. Many Bank, Razvojna Banka and LHB Bank or insiders assume that the merger will not withstand Justice Banja Luka. the competition rules on that market. Fehriye Erdal found guilty of terrorism 2 KBC also has takeover plans in Croatia, To placate the Belgian government even more, Mestrallet is now calling the merger an ‘opération Fehriye Erdal vanished 2 where the banker-cum-insurer has its franco-belge’. According to De Tijd (2 March) the sights set on Splitska Banka. ‘We have Belgians are in that respect being used as a fig leaf to camouflage the French chauvinism behind the Agriculture, social policy and economy submitted an indicative offer on the strategy. But even though decisions are taken in Tuybens reveals salaries of senior matter’, André Bergen, deputy chair- Paris, the enormous Belgian contribution to Suez cannot be ignored, points out Trends (2 March). managers of state enterprises 3 man of the board of directors of the KBC Seventy percent of Suez’s profits are of Belgian Bird flu: chicken breeders suffer losses 3 Group, confirmed for the first time. making: Electrabel, Tractebel (energy assets out- Belgian energy market after the merger However, due to an old financial dis- side Europe), Distrigas (natural gas trading) and Fluxys (natural gas transmission). It is this Belgian Suez-GdF 4 pute between Slovenia and Croatia, energy pillar that succeeded in reviving fortunes at Suez-GdF will have to downsize 5 KBC is not welcome in the country. But Suez, which was making a loss in 2002 and 2003. According to Trends, the merger is a normal mar- Belgium keeps borders closed for that is not stopping the group from tak- ket development. Mestrallet has a point when he employees from Eastern Europe 5 ing part in the bidding process. stresses the synergy between gas and electricity in his industrial project. Gas-fired power stations are Inbev management and trade unions In Romania KBC is not planning any playing an ever greater role in that. On markets heading for confrontation 6 acquisitions, but is working on setting where gas is expensive, Suez-GdF can sell gas, and up its own banking subsidiary. This on other markets gas is used to produce electricity, that can be sold as well. Politics and public health should be up and running this year. Last But the main motive for Suez opting for a merger Leterme’s popularity peaks in poll 6 year the Belgian group did not take part is its vulnerability. With its lucrative (Belgian) ener- gy division, it is an attractive prey for a takeover. New criteria for recognition as GP 7 in the bidding for BCR, the largest bank Three quarters of its shares are listed and it has a in the country, because the price tag weak financial balance sheet with substantial cash Culture was too high. assets and numerous liabilities. People from Antwerp turned Frankfurt www.kbc.com Frank Vandecaveye | editor in chief into a financial centre 7 table page 3 ■ focus on FLANDERS • 25 February - 3 March 2006 • Number 9 2 JUSTICE TERRORISM Fehriye Erdal and DHKP-C Anyone knowingly and voluntarily forming part of an organisation that at- tempts to achieve its aims through vio- found guilty of terrorism lence is punishable. Even if that person has not committed any crime in Bel- gium. The judges in Bruges point to the ive years ago the police found a the ringleaders, Dursun Karatas, has fact that the DHKP-C militants are ‘fa- F stash of arms, false identity papers been sentenced to five years (FF). natical’ and ‘permanently dangerous’. and detonation mechanisms for explo- Their presence on Belgian soil cannot sives in an apartment in the Flemish FILIP VERHOEST • DE STANDAARD • 1 MARCH be tolerated. There were tight security coastal town of Duinbergen. The apart- measures in force around the court ment turned out to be the safe house for EThe other DHKP-C members who building in Bruges. The many DHKP-C the Turkish Popular Liberation Army were caught in 1999 in an apartment in sympathisers who had turned up (DHKP-C), a Marxist-Leninist Turkish Duinbergen, near Knokke, were each chanted slogans for ‘freedom of expres- movement that swears by the armed sentenced to five years’ imprisonment, sion and association’. struggle against the Turkish State. like Erdal. The public prosecutor had After this judgement it is expected that DHKP-C members who were being pur- called for ten years for the ringleaders, the Belgian judiciary will close the sued in Germany were able to use the and five for Erdal. Four of the accused DHKP-C information office in Brus- hiding place. Because the movement were acquitted, since they did not sels. At a press conference in June 2004 has already carried out several attacks knowingly take part in the Turkish a spokesman for the movement justi- in its homeland and executed a number Popular Liberation Army’s activities. fied a bomb attack on a bus in Istanbul of ‘traitors’, that country is still It is the second time that a Belgian which went wrong, and in which three demanding the extradition of all court has applied the anti-terrorism people died. According to the judge, DHKP-C members. Belgium is not law of 1 January 2004 to an extremist that is ‘intolerable’. The court ordered acceding to that for the time being, but group. This had previously happened the immediate detention of six of the brought charges against the members of before the tribunale correctionnel seven who were convicted, including the Turkish group in the criminal (criminal court) in Brussels, with the Erdal. She was not present at the sit- court. Fehriye Erdal, the symbol of the Groupe Islamique Combattant Maro- ting, but will be taken to prison from DHKP-C’s fight, was sentenced to four cain (GICM).