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28.12.2012 Official
Journal
of
the
European
Union L
357/15
COMMISSION DECISION
of 25 July 2012
on measure SA.34440 (12/C) implemented by Luxembourg concerning the sale of Dexia BIL
(notified under document C(2012) 5264)
(Only the French text is authentic)
(Text with EEA relevance)
(2012/836/EU)
THE EUROPEAN COMMISSION,
(3) By
decision
of
13
March
2009,
the
Commission
decided
to open the formal investigation procedure laid down in
Article 108(2) TFEU on all the aid measures granted to
Having regard to the Treaty on the Functioning of the European
Dexia SA ( 5 ).
Union, and in particular the first subparagraph of Article 108(2)
thereof ( 1 ),
(4) By
decision
of
30
October
2009
( 6 ), the Commission
authorised the extension of the guarantee referred to in
Having regard to the Agreement on the European Economic
recital (1) until 28 February 2010 or until the date of the
Area, and in particular Article 62(1)(a) thereof,
Commission decision concerning the compatibility of the
aid measures and the restructuring plan for Dexia.
Having called on interested parties to submit their comments
pursuant to the above Articles ( 2 ) and having regard to their
(5)
On 9 February 2010 the Member States concerned sent
comments,
the Commission information on the additional measures
planned to supplement the initial restructuring plan
notified in February 2009.
Whereas:
(6) By
decision
of
26
February
2010
( 7 ), the Commission
1. PROCEDURE
authorised the restructuring plan for Dexia and the
conversion of the rescue aid into restructuring aid on
(1) By
decision
of
19
November
2008
( 3 ), the Commission
condition that all the commitments and conditions estab
decided not to raise any objections to the emergency
lished by the decision were complied with.
measures concerning a liquidity assistance operation
(hereinafter: ‘LA operation’) and a guarantee for certain
of Dexia’s liabilities ( 4 ). The Commission considered these
(7) Since
the
summer
of
2011
Dexia
has
encountered
further
measures to be rescue aid to an undertaking in difficulty
difficulties and the Member States concerned have
and therefore compatible with the internal market on the
envisaged additional aid measures.
basis of Article 107(3)(b) TFEU, and authorised the
measures for a period of six months from 3 October
2008, specifying that after that time the Commission
(8) By
decision
of
17
October
2011
( 8 ), the Commission
would re-evaluate the aid as a structural measure.
decided to open a formal investigation procedure into
the measure involving the sale by Dexia SA of Dexia
Bank Belgium (hereinafter: ‘DBB’) and its acquisition by
(2) Belgium,
France
and
Luxembourg
(hereinafter:
‘the
the Belgian State. In the interest of preserving financial
Member States concerned’) notified to the Commission
stability, the Commission also decided to temporarily
an initial restructuring plan for Dexia on 16, 17 and
approve the measure. The measure is therefore
18 February 2009 respectively.
approved for six months from the date of the decision
in question or, if Belgium submits a restructuring plan
( 1 ) With effect from 1 December 2009, Articles 87 and 88 of the EC
within six months of that date, until such time as the
Treaty have become Articles 107 and 108, respectively, of the Treaty
Commission adopts a final decision on the measure.
on the Functioning of the European Union (‘TFEU’). The two sets of
provisions are, in substance, identical. For the purposes of this
Decision, references to Articles 107 and 108 of the TFEU should
be understood as references to Articles 87 and 88, respectively, of
(9) On
18
October
2011
the
Member
States
concerned
the EC Treaty, where appropriate. The TFEU also introduced certain
informed the Commission of a set of potential new
changes in terminology, such as the replacement of ‘Community’ by
measures for a new plan for the restructuring or
‘Union’, ‘common market’ by ‘internal market’ and ‘Court of First
dismantling of Dexia. As part of the set of new
Instance’ by ‘General Court’. The terminology of the TFEU is used
throughout this Decision.
( 2 ) OJ C 146, 12.5.1998, p. 6, and OJ C 210, 1.9.2006, p. 12.
( 5 ) OJ C 181, 4.8.2009, p. 42.
( 3 ) C(2008) 7388 final.
( 6 ) OJ C 305, 16.12.2009, p. 3.
( 4 ) In this Decision, ‘Dexia’ and ‘the Dexia group’ refer to Dexia SA and
( 7 ) OJ L 274, 19.10.2010, p. 54.
all of its subsidiaries.
( 8 ) OJ C 38, 11.2.2012, p. 12.

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L 357/16
EN
Official Journal of the European Union
28.12.2012
measures, on 21 October 2011 Belgium notified to the
principal of EUR 55 billion. In its decision of 6 June
Commission a measure involving recourse by DBB to the
2012 ( 4 ), the Commission temporarily approved, until it
emergency liquidity assistance (hereinafter: ‘ELA’) with a
takes a final decision on the orderly resolution plan for
guarantee by the Belgian State. The measure enables DBB
Dexia, the increase in the guarantee ceiling.
to grant financing to Dexia Crédit Local SA (hereinafter:
‘DCL’).
Procedure relating to the sale of Dexia Banque Inter
nationale à Luxembourg
(10) On 14 December 2011 France, Belgium and
Luxembourg also notified to the Commission, as part
(17) On
6
October
2011
Dexia
SA
announced
in
a
press
of the set of new measures, a draft temporary
release ( 5 ) that it had entered into exclusive negotiations
guarantee by the Member States concerned on the refi
with a group of international investors, in which the
nancing of Dexia SA and DCL (hereinafter: ‘temporary
State of Luxembourg would participate, with a view to
refinancing guarantee’).
the sale of Dexia Banque Internationale à Luxembourg
(hereinafter: ‘Dexia BIL’). The board of the Dexia group
(11) By
decision
of
21
December
2011
(hereinafter:
‘opening
was to express its opinion on the content of any offer at
decision on additional aid for the restructuring of
the end of the exclusivity period.
Dexia’) ( 1 ), in the interest of preserving financial stability,
the Commission decided to temporarily approve the
temporary refinancing guarantee until 31 May 2012.
(18) On
18
December
2011
the
Commission
was
informed
However, with this Decision, the Commission opened a
that a binding Memorandum of Understanding on the
formal investigation procedure in relation to all the
sale of Dexia SA’s 99,906 % holding in Dexia BIL was
additional measures for the restructuring of Dexia
about to be concluded. Under the Memorandum of
(including the temporary refinancing guarantee) since
Understanding, Precision Capital SA, a Qatari investment
the adoption of the conditional decision and asked the
group, was to acquire 90 % of the holding, and the
Member States concerned to notify to it, within three
remaining 10 % was to be acquired by Luxembourg.
months, a restructuring plan for Dexia or, if Dexia’s
Certain of Dexia BIL’s assets are excluded from the
viability could be restored, an orderly resolution plan
scope of the sale.
for Dexia.
(19) The sale of Dexia BIL was not part of the measures
(12) On 21 and 22 March 2012 the Member States
approved by the Commission under the restructuring
concerned notified to the Commission an orderly
plan for Dexia approved on 26 February 2010. Nor
resolution plan for Dexia.
was it covered by the formal investigation procedure
opened by the Commission decision of 21 December
(13) On
25
May
2012
the
Member
States
concerned
notified
2011 concerning the restructuring measures notified to
to the Commission a request to extend the temporary
the Commission after that date.
refinancing guarantee. On 31 May 2012 the Commission
adopted two decisions.
(20) The
sale
of
Dexia
BIL
had
already
been
brought
to
the
Commission’s attention before 21 December 2011. The
(14) In the first decision (hereinafter: ‘the decision to extend
sale of Dexia BIL will therefore be analysed by the
the procedure’), the Commission decided to extend the
Commission separately from the restructuring of Dexia,
formal investigation procedure relating to the Dexia
not only because of the need to establish legal certainty
group in order to examine the orderly resolution plan
as quickly as possible, but also and above all because the
for the Dexia group submitted by Belgium, France and
sale of Dexia BIL is independent from the restructuring of
Luxembourg on 21 and 22 March 2012 ( 2 ).
the group in the light of the aid measures that were
temporarily approved in 2011, given that the sale had
(15) In the second decision (hereinafter: ‘the decision to
already been envisaged since 2009, according to
extend the guarantee’) ( 3 ), the Commission temporarily
information received by the Commission, and that
approved, until it takes a final decision on the orderly
Dexia BIL will be legally and economically separate
resolution plan for Dexia, an extension until
from Dexia.
30 September 2012 of the period for issuing the
temporary guarantee by the Member States concerned
in relation to the refinancing of Dexia SA and DCL,
(21) On
23
March
2012
Luxembourg
formally
notified
the
while at the same time extending the formal investigation
sale of Dexia BIL to the Commission.
procedure to this measure.
(22) By decision dated 3 April 2012 ( 6 ), the Commission
(16) On
5
June
2012
the
Member
States
concerned
notified
informed Luxembourg that it had decided to initiate
to the Commission an increase in the ceiling of the
the formal investigation procedure laid down in
temporary guarantee to the maximum amount of
Article 108(2) of the Treaty on the Functioning of the
European Union in respect of the sale of Dexia BIL.
( 1 ) Decision published on DG Competition’s website: http://ec.europa.
eu/competition/state_aid/cases/243124/243124_1306879_116_2.
( 4 ) Decision of 6 June 2012 in Cases SA.34925, SA.34927, SA.34928,
pdf
increase in the temporary guarantee ceiling, not yet published.
( 2 ) Decision of 31 May 2012 in Case SA.26653, restructuring of Dexia,
( 5 ) The press release is available on the Dexia group website: http://
not yet published.
www.dexia.com/FR/Journaliste/communiques_de_presse/Pages/
( 3 ) Decision of 31 May 2012 in Cases SA.33760, SA.33764,
Entree-en-negociation-exclusive-pour-la-cession-de-Dexia-Banque-
SA.33763, additional restructuring measures for Dexia –
Internationale-a-Luxembourg.aspx
temporary guarantee, not yet published.
( 6 ) OJ C 137, 12.5.2012, p. 19.

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EN
28.12.2012 Official
Journal
of
the
European
Union L
357/17
(23) On
4
May
2012
and
12
June
2012
the
Luxembourg
2. THE FACTS
authorities provided the Commission with additional
information, including an update by Dexia SA of the
2.1. Description of the Dexia group
fairness opinion for Dexia BIL dated 30 May 2012 (here
inafter: ‘updated fairness opinion’).
(26) Dexia BIL is part of Dexia group. Dexia was formed in
1996 by the merger of France’s Crédit Local and
Belgium’s Crédit Communal and was specialised in
(24) The
Commission
decision
to
initiate
the
formal
investi
loans to local authorities, but also had some 5,5 million
gation procedure was published in the Official Journal of
private customers, mainly in Belgium, Luxembourg and
the European Union ( 1 ). The Commission called on
Turkey.
interested parties to submit their comments on the
measure in question.
(25) The
Commission received comments from interested
parties. It communicated them to Luxembourg, giving
(27) The Dexia group was organised around the parent
the Luxembourg authorities the opportunity to
holding company (Dexia SA) and three operational
comment on them, and received their comments by
subsidiaries located in France (DCL), Belgium (DBB) and
letter dated 28 June 2012.
Luxembourg (Dexia BIL).
Simplified organisation chart of the group on 30 September 2011
(i.e. before execution of the transfers announced at the meeting of the Dexia board held on 9 October 2011)
(28) On
20
October
2011
DBB
was
sold
to
the
Belgian
State
and, on 31 December 2011, the consolidated balance-
Shareholder
% holding at
31 December 2011
sheet total of the Dexia group (deconsolidation of DBB
on 1 October 2011) was EUR 413 billion.
Caisse des Dépts et Consignations 17,6
%
(29) In
addition
to
the
sale
of
DBB
that
took
place
on
Holding Communal 14,3
%
20 October 2011, the Dexia group announced the sale
‘in the short term’ of the following companies:
Arco Group 12,0
%
French Government 5,7
%
— Dexia BIL
Belgian Government 5,7
%
— Dexia Municipal Agency
Ethias 5,0
%
— DenizBank
3 Belgian regions 5,7
%
— Dexia Asset Management (hereinafter: ‘DAM’)
CNP Assurances 3,0
%
— RBC Dexia Investor Services (hereinafter: ‘RBCD’).
Employees 0,6
%
(30) The
holdings
of
the
main
shareholders
in
Dexia
SA
are
as
Others 30,4
%
follows:
Source: Dexia, presentation of financial results for 2011, 23 February
2012, p. 51; included in the orderly resolution plan notified to
( 1 ) Decision of 3 April 2012 in Case SA.34440 Sale of Dexia BIL, OJ
the Commission.
C 137, 12.5.2012, p. 19.

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L 357/18
EN
Official Journal of the European Union
28.12.2012
2.2. Description of Dexia BIL
(38) Dexia’s
financing
requirements
increased
markedly
for
the following reasons:
(31) Dexia
BIL
is
one
of
the
largest
commercial
banks
in
Luxembourg, with a balance-sheet total of EUR 41
billion on 30 June 2011. Dexia BIL operates not only
(i) the sharp fall in interest rates during the summer of
in Luxembourg, but also in other countries such as Swit
2011 increased by at least EUR [5-20] billion the
zerland, the United Kingdom and some countries in Asia
need for additional collateral to cope with the
and the Middle East, either directly or through certain of
margin calls linked to the variation in the market
its subsidiaries. Dexia BIL also holds a substantial
value of the portfolio of interest-rate derivatives
portfolio of legacy securities, with an estimated market
used to hedge the balance sheet;
value at 30 September 2011 of approximately EUR
[5–10] billion.
(ii) many bond issues (in particular sovereign-guaranteed
bonds previously issued by Dexia) matured at a time
when market conditions for refinancing these bonds
(32) Dexia
BIL
is
one
of
the
large
banks
with
a
branch
were not optimal;
network in Luxembourg and is an essential player in
the local economy as both a depositary bank for
resident individuals and businesses, and a provider of
(iii) the substantial fall in market value and decline in the
consumer credit, property loans and business lending.
credit quality of the assets that Dexia uses by way of
security to obtain financing;
(33) According to the tables provided by Luxembourg’s
(iv) the loss in confidence by many investors following,
financial supervisory authority (Commission de surveillance
among other things, the announcement of
du secteur financier - CSSF), Dexia BIL is the bank of choice
substantial losses in the second quarter of 2011
for [10-15] % of individual residents and [15-20] % of
(almost EUR 4 billion) and downgrades by some
resident SMEs (small and medium-sized enterprises), both
rating agencies;
groups placing it in third position on the Luxembourg
market. Dexia BIL’s market shares in the Luxembourg
banking system are approximately [10-15]
% by
(v) Dexia’s difficulties also resulted in massive with
volume of deposits, [10-15] % by volume of loans and
drawals of deposits by customers in Belgium and
[5-10] % of assets under management in the private
Luxembourg in October 2011.
banking sector.
(39) Given
that
it
was
impossible
for
Dexia
to
refinance
itself
on the markets and […] (*), initially it had to resort to a
2.3. Difficulties faced by Dexia
new ELA measure by the Banque nationale de Belgique
(34) The difficulties faced by the Dexia group during the
and the Banque de France respectively. It is in these
financial crisis in autumn 2008 were described in the
circumstances that the Member States concerned
decision of 26 February 2010. Dexia’s more recent
granted the temporary refinancing guarantee in favour
difficulties may be summarised as follows.
of Dexia.
(40) Although Dexia BIL was not the source of the Dexia
(35) First, the worsening of the sovereign debt crisis, which
group’s problems, […], it faced substantial deposit
many European banks are facing, has resulted in
outflows, in particular between 30 September 2012
increasing mistrust on the part of investors towards
and 10 October 2011, a period during which deposits
bank counterparties, so the latter are unable to obtain
fell by EUR [1-5] billion (from EUR [5-15] billion to
financing in satisfactory volumes and under satisfactory
EUR [5-15] billion). The deposit outflows subsequently
conditions.
stabilised following the announcement of a series of
measures intended to dismantle the Dexia group and
secure certain of the group’s subsidiaries (including
(36) Furthermore,
since
the
Dexia
group
has
been
particularly
Dexia BIL). In particular, on 6 October 2011 Dexia
exposed to sovereign and quasi-sovereign risk, the level
announced that it had entered into negotiations with a
of mistrust among investors is higher. Dexia has among
group of investors and the State of Luxembourg with a
its assets many loans and/or bonds from countries and/or
view to selling Dexia BIL. Since bottoming at EUR [5-15]
local and regional authorities in countries perceived as
billion on 22 November 2011, Dexia BIL’s deposits
risky by the market.
showed a slight improvement to EUR [5-15] billion
EUR on 14 December 2011.
(37) In
addition,
the
current
crisis
hit
before
Dexia
had
time
2.4. Description of the sale of Dexia BIL
to finalise implementation of its restructuring plan,
which would have resulted in a much stronger liquidity
(41) On
23
March
2012
Luxembourg
notified
the
sale
of
risk profile. Since Dexia still had a particularly vulnerable
Dexia BIL. Closure of the sale is subject to the prior
liquidity profile and the market was well aware of that
approval of the Commission.
vulnerability, it is possible that Dexia faced more mistrust
than other banks.
(*) Confidential information […].

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EN
28.12.2012 Official
Journal
of
the
European
Union L
357/19
(42) The measure of the sale of Dexia BIL notified to the
(47) The
measure
notified
on
23
March
2012
included
a
Commission was not the subject of a formal call for
clause stipulating that, if Dexia SA or a company in
tenders. According to the Luxembourg authorities, the
the Dexia group obtained a sovereign guarantee in
sale of Dexia BIL had apparently been envisaged for a
favour of a buyer in relation to its indemnification
long time by Dexia, which contacted a series of operators
obligations towards that buyer under contractual guar
in that regard between 2009 and 2011, in particular
antees specific to the sale, and if the buyer is a private
[…]. […]. The discussions had made some progress but
entity (not controlled directly or indirectly by public
none of the operators had submitted a tangible plan to
entities), then Dexia undertakes to ensure that a
acquire Dexia BIL.
guarantee on similar terms and for similar contractual
obligations is granted by the same guarantor (or an alter
native guarantor with the same credit rating) to the
(43) Finally,
contacts
with
Precision
Capital
resulted
in
the
buyers under the sale contracts. This obligation was to
start of exclusive negotiations, which was announced
have applied until 1 January 2017 (hereinafter: ‘clause
on 6 October 2011. A binding draft agreement on the
3.3.5’). However, the clause was subsequently dropped
sale of Dexia’s 99,906 % holding in Dexia BIL was
and was not included in the final contracts for transfer
concluded by a Memorandum of Understanding (here
of shares that replaced the MoU.
inafter: ‘MoU’) on 20 December 2011. Under the
Memorandum of Understanding, Precision Capital will
acquire 90 % of the holding, the remaining 10 % being
acquired by Luxembourg under the same terms and
(48) Before
the
MoU
was
finalised,
various
scenarios
under
the
conditions as Precision Capital.
preliminary draft of the sale of Dexia BIL were subject to
a fairness opinion by a third party ( 1 ). The evaluation
dated 10 December 2011 was carried out using three
different methods ( 2 ) and resulted in a valuation of
(44) Certain
of
Dexia
BIL’s
assets
are
excluded
from
the
scope
between EUR [600-700] and [800-900] million. The
of the sale, which relates only to part of Dexia BIL, i.e. its
updated evaluation dated 30 May 2012 comes to the
retail and private banking businesses (hereinafter: ‘the
same conclusions.
sold businesses’). More specifically, the following are
excluded from the scope of the sale: Dexia BIL’s 51 %
holding in DAM, its 50 % holding in RBCD, its 40 %
holding in Popular Banca Privada, its portfolio of
2.5. Grounds for initiating the formal investigation
legacy securities (and certain derivative and associated
procedure
products) and its holdings in Dexia LDG Banque and
Parfipar. The above businesses will be transferred to
(49) In the opening decision, the Commission took the view
Dexia before the transaction is completed, with a clause
that it could not, at that stage, conclude that the trans
for the recovery of the net proceeds from the transfers by
action did not involve any aid.
Dexia BIL. Furthermore, the MoU provides as a precon
dition for the sale the elimination of all the unsecured
borrowing and lending with companies in the Dexia
group and the elimination of much of the secured
(50) The
Commission
took
the
view
that
clause
3.3.5
might
borrowing and lending with companies in the Dexia
contain state aid.
group. On 10 February 2012 the financing granted to
the other companies in the group was approximately
EUR [0-5] billion, of which less than EUR [500-800]
million was secured. The exclusion of all these assets
(51) It also took the view that the sale process for Dexia BIL
will make it possible to reduce Dexia BIL’s total assets
had not been open, transparent and non-discriminatory.
by approximately EUR 16,9 billion in relation to total
The sale process had been restricted to bilateral negoti
assets of EUR 41 billion on 30 June 2011 (i.e. a 40 %
ations with a number of potential buyers without a call
reduction in total assets and a 50 % reduction in risk-
for tenders. The Commission could not, therefore,
weighted assets).
conclude that the sale process had been such as to
ensure the setting of a market price and, consequently,
that it did not contain any state aid.
(45) The
notified
measure
stipulates
that,
when
the
sale
is
completed, Dexia BIL will have a Common Equity Tier
1 ratio under Basel III of exactly 9 %.
(52) According to the Commission’s understanding, the
fairness opinion by a third party ( 3 ) had been established
during the negotiations and before the setting of the
(46) The
sale
price
is
set
at
EUR
730
million,
with
Dexia
BIL
having a Common Equity Tier 1 ratio of exactly 9 %
( 1 ) Equité du prix de cession de BIL à Precision Capital/Eléments préliminaires
when the sale is completed. In the event that the
en l'état actuel des négociations dated 10 December 2011.
capital at the time of completion exceeds the 9 %
( 2 ) (i) The discounted cash flows to equity method on the basis of the
Common Equity Tier 1 ratio under Basel III, the sale
cash flow distributable to shareholders, subject to compliance with
price will be adjusted by the excess capital available at
the core tier 1 regulatory ratios. (ii) The price to book ratio method,
the time of completion. If there is a shortfall of capital in
on the basis of excess profitability in relation to the cost of capital.
(iii) The comparable listed companies method.
relation to the 9 % Common Equity Tier 1 ratio, the
( 3 ) Equité du prix de cession de BIL à Precision Capital/Eléments préliminaires
shortfall will be offset by Dexia SA.
en l'état actuel des négociations dated 10 December 2011.

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L 357/20
EN
Official Journal of the European Union
28.12.2012
precise conditions in the MoU dated 20 December 2011,
(59) The
many
contacts
between
Dexia
SA
and
potential
which was notified on 23 March 2012. The Commission
buyers since 2009, in conjunction with the official
therefore had doubts about whether the fairness opinion
announcement on 6 October 2011 of the potential
had taken into account the exact scope of the sold busi
sale of Dexia BIL to an international group of investors,
nesses and the conditions of the notified measure,
had made public the planned sale of Dexia BIL. Exclusive
including the clause for the recovery of the net
negotiations were not formally opened until more than
proceeds from the transfers by Dexia BIL and clause
two weeks later, so any other serious candidates
3.3.5.
interested in buying Dexia BIL would have had more
than enough time to express their interest. Moreover,
the conditions of sale of Dexia BIL were determined by
Dexia SA with Precision Capital during arm’s length
(53) The Commission could not conclude, therefore, that the
negotiations between private operators, under their own
conditions of sale of Dexia BIL resulted in a sale at the
liability and without committing state resources.
market price, given the combined effects of the absence
Furthermore, it was urgent to find a buyer for Dexia
of an open call for tenders and the lack of precise
BIL in order to protect the bank’s depositors and
information about the appropriate valuation of the trans
customers, to preserve the bank’s value, and to reduce
action, having regard in particular to the scope of the
the risks of contagion to the rest of the financial system.
sold businesses and the potential clause 3.3.5.
Under these circumstances, the sale process for Dexia BIL
may be regarded as an open, transparent and non-
discriminatory process, such as to ensure the formation
of a market price. It does not, therefore, contain any state
3. COMMENTS BY THIRD PARTIES
aid.
(54) Following the publication of the formal investigation
(60) The
fairness
opinion
dating
from
December
2011
related
procedure on 3 April 2012, the Commission received
to the new scope of Dexia BIL (sold businesses), which is
comments from two third parties.
confirmed by the updated fairness opinion dated 30 May
2012.
(61) The
sale
price
is
based
on
a
Core
Equity
Tier
1
capital
(55) One
of
the
comments
received
(hereinafter:
‘comment
A’)
ratio under Basel III of 9 % at the time the sale was
from an investors’ association concerns the level of the
completed. If there is a difference between this level
purchase price. The association takes the view that the
and the level of capital when the transfer is completed,
sale price for Dexia BIL is too low, in particular in the
the adjustment clause guarantees that the difference will
light of Dexia BIL’s good results in the past.
be repaid by the buyers or the seller and/or that the sale
price will be adjusted. Under these conditions, Dexia SA
takes the view that the valuation of shareholdings or
assets excluded from the transaction should not be
(56) The
comments
(hereinafter:
‘comment
B’)
by
the
other
taken into account when determining the market price.
third party, a shareholder in Dexia SA, expressed doubts
about the behaviour of Dexia SA, Dexia BIL and the
(62) Dexia
BIL
did
not
benefit
directly
from
the
previous
aid
individuals and bodies supposed to supervise these
received by the Dexia group. On the contrary, since the
companies since 1998. The shareholder also believes
end of 2008, Dexia BIL has constantly been a net
that Dexia SA does not provide sufficient information
provider of liquidity to the Dexia group. In addition,
to its shareholders. The shareholder also takes the view
the Commission cannot presume that, because a
that the minutes of the Annual General Meetings since
company belongs to a group of companies, the
1999, the annexes relating to its own statements at those
company has benefited from aid received by the group,
meetings, and all the correspondence between itself,
in particular where, as in this case, the transfer mech
Dexia SA, Dexia BIL and its managers should have
anisms existing in the group have been used solely to the
been sent by Dexia SA to the potential buyers of Dexia
detriment of the company and not for its benefit (
BIL.

1 ).
Likewise, the Commission cannot presume that the trans
action is imputable to the State or commits state
resources when it is carried out at arm’s length
between Dexia and the buyer without involving state
4. COMMENTS BY DEXIA SA
resources.
(57) Dexia SA stresses that the sale of Dexia BIL is an
important stage in the stabilisation of Dexia BIL after
( 1 ) See in particular the judgment of 19 October 2005 in Case
the outflows of deposits that took place at the
T-324/00 CDA Datentraeger Albrecht v Commission [2005] ECR
beginning of October 2011. It is essential to provide
II-4309, paragraph 93: ‘… the Commission’s argument that the
scope of the recovery order in Article 2 of the contested decision
confirmation as soon as possible to the parties to the
is justified on the ground that the joint venture and its successors
transaction that the sale of Dexia BIL contains no aid.
belong to a group of linked undertakings within which there are
internal mechanisms for transferring assets must be rejected. it is
clear from the findings set out in the contested decision that, in this
case, the transfer mechanisms existing within that group were used
only to the detriment of that venture and not for its benefit. It
(58) Since clause 3.3.5 has not been included in the final
cannot therefore be claimed that, on the ground that it belonged
contracts for the transfer of shares that replaced the
to that group, the joint venture actually benefited from aid of which
MoU, these concerns are groundless.
it was not the recipient.’

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EN
28.12.2012 Official
Journal
of
the
European
Union L
357/21
(63) In any event, Dexia SA stresses the fact that the
(69) Luxembourg also points out that the sale of Dexia BIL
acquisition of Dexia BIL at the market price is enough
had been envisaged for a long time by Dexia SA, which
to eliminate the possibility of a potential transfer of
to that end had contacted a series of operators between
previous aid received by the Dexia group to the buyer
2009 and 2011, in particular […]. The discussions
or to the sold company, Dexia BIL ( 1 ).
undertaken had made some progress but none of the
operators had expressed an interest in Dexia BIL.
Although the Luxembourg authorities acknowledge that
the process did not constitute a formal call for tenders,
(64) The
sale
of
Dexia
BIL
cannot
include
new
aid
because
the
they point out that it is unlikely that a formal invitation
acquisition by the State of Luxembourg is taking place
to tender would have produced a different result. It was
without it injecting new capital into Dexia BIL. In that
impossible to organise such an invitation to tender
context, Dexia SA emphasises that, in the absence of
within the shortened deadline dictated by the accelerating
additional aid, the sale of Dexia BIL does not distort
erosion of Dexia BIL’s deposits at the end of September
competition, so it is not necessary to impose additional
2011 because of the rumours concerning the difficulties
measures to limit distortions of competition. In any
of the Dexia group and the downgrade of Dexia SA's
event, the reduction in the size of Dexia BIL through
rating by the rating agency Moody's on 3 October
the businesses excluded from the sale is sufficiently
2011, which added to the rumours swirling around the
large not to require additional measures.
European banking system, the sovereign debt crisis and
the difficulties in the euro area. This urgent situation
resulted in the announcement on 6 October 2011 of
the planned sale of Dexia BIL and the entry into negoti
5. COMMENTS BY LUXEMBOURG
ations with Precision Capital. Between that date and the
(65) Luxembourg takes the view that the sale of Dexia BIL is a
opening of exclusive negotiations ( 3 ), no other serious
private-market solution that does not contain any state
expression of interest or offer was received, despite […]
aid.
enquiries by other potential investors ( 4 ).
(70) In the opinion of the Luxembourg authorities, an
(66) Luxembourg points out that the planned sale of Dexia
informal tender process, organised to a tight deadline
BIL was officially announced on 6 October 2011, i.e.
and using specific procedures dictated by the circum
before the announcement of the additional guarantees
stances, could be regarded as an open, transparent and
on new refinancing granted by the Member States
non-discriminatory procedure which ensures the
concerned to Dexia SA and DCL.
formation of a market price. The Luxembourg authorities
also point out that a fairness opinion dated 10 December
2011 and the update of 30 May 2012 conclude that the
(67) Luxembourg stresses that Dexia BIL is one of the large
price is fair in the current market context and that the
banks with a branch network in Luxembourg and is an
Commission had already accepted that the valuation of a
essential player in the local economy as both a depositary
company may be in line with a market price on the basis
bank for resident individuals and businesses, and a
of a fairness opinion carried out by an independent
provider of consumer credit, property loans and
expert.
business lending. Dexia BIL plays a systemic role in the
Luxembourg economy ( 2 ) and a failure of this bank (or
even merely uncertainty as to its fate) would have
(71) Since
the
end
of
2008,
Dexia
BIL
has
constantly
been
a
extremely serious effects on the stability of Luxembourg’s
net provider of liquidity to the other companies in the
financial system and economy in general, which could
group. As for the new temporary guarantee approved
also be felt in neighbouring countries.
provisionally by the Commission on 21 December
2011, Dexia BIL was not a guaranteed company and
does not benefit from this temporary guarantee.
(68) The
Luxembourg
authorities
maintain
that
there
is
no
advantage for Dexia SA or Dexia BIL arising from the
acquisition by the Luxembourg State of a 10 % holding
(72) Furthermore,
the
Luxembourg
authorities
point
out
that
in Dexia BIL because the acquisition took place under
Dexia BIL will have a strong liquidity position after the
market conditions, and the price paid and the terms
sale, will focus on retail banking and private banking,
were the same as for Precision Capital.
and will have cut its ties to the residual Dexia group
by disposing of the legacy portfolio and Dexia LDG
( 1 ) See in particular the judgment of 20 September 2001 in Case
and selling its holdings in RBCD and DAM. Likewise,
C-390/98 Banks [2001] ECR I-6117, paragraph 78: ‘…where a
the MoU is based on an absence of financing by Dexia
company which has benefited from aid has been sold at the
BIL of Dexia SA or other companies in the residual
market price, the purchase price reflects the consequences of the
group post-sale.
previous aid, and it is the seller of that company that keeps the
benefit of the aid. In that case, the previous situation is to be
restored primarily through repayment of the aid by the seller.’
( 3 ) Even though the board had ratified exclusive negotiations with
( 2 ) Dexia BIL, with almost 40 branches in the Grand Duchy, is the third
Precision Capital on 9 and 10 October 2011, the formal period
largest bank in the Luxembourg market, and holds approximately
of exclusivity did not begin until 23 October 2011 with the
[5-15] % of deposits, [5-15] % of loans and some [5-15] % of assets
signing of a letter of intent.
under management in the private banking sector.
( 4 ) […].

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L 357/22
EN
Official Journal of the European Union
28.12.2012
(73) Luxembourg
is
also
requesting
that
Dexia
BIL
no
longer
information and contains mistaken assertions, without
be subject to the conditions and commitments laid down
the slightest piece of evidence, with the result that they
in the Decision of 26 February 2010, or to the new
would ask the Commission not to take it into account in
restructuring and orderly resolution plan for Dexia to
its final decision but rather to refer to the explanations
be drawn up under the Decision of 21 December
by the Luxembourg authorities and Dexia SA in their
2011. Being subject to the restructuring plan approved
exchanges with the Commission, which fully answer
by the Decision of 26 February 2010 and to the
the questions raised and dispel the criticisms levelled.
conditions and commitments provided for by the plan
is linked to Dexia BIL belonging to the Dexia group,
which is identified as the sole beneficiary of the aid
(80) The Luxembourg authorities note that comment B
granted in previous decisions. Moreover, this point is
consists of a series of exchanges of correspondence by
evident in most of the commitments under the restruc
the third party in question with the management of
turing plan for Dexia, which apply to Dexia or Dexia SA
Dexia SA and Dexia BIL, and with the supervisory auth
and concern Dexia BIL only to the extent that it is a
orities, between 2005 and the end of 2011, with no
subsidiary of the group and forms a single economic
direct bearing on the sale of Dexia BIL. The
unit with Dexia SA. In any event, the sale of Dexia BIL
correspondence relates to different requests to and
does not contain any state aid and is carried out at a
criticisms of Dexia SA concerning the failure to take
market price.
into account certain questions about events well before
the sale of Dexia BIL, which is the only subject of this
(74 Luxembourg,
in
its
observations
on
the
opening
decision,
Decision on the sale of Dexia BIL. The Luxembourg auth
confirms that clause 3.3.5 has not been included in the
orities therefore call on the Commission to set aside the
final share purchase contracts that replaced the MoU, and
documents as irrelevant.
that these concerns are groundless.
(81) The Luxembourg authorities note that Dexia SA
(75) The
Luxembourg
authorities
also
confirm
that
the
scope
concludes (see section 4 above) that the Dexia BIL trans
of the fairness opinion coincides exactly with the scope
action is being carried out at a market price without any
of the sold businesses. In addition, the adjustment
aid. This conclusion is consistent with the conclusions of
mechanism in relation to the exact level of 9 %
the Luxembourg authorities, and so does not require
Common Equity Tier 1 under Basel III ensures that the
further comment by them.
value of the businesses excluded from the transaction

(recital (36)) does not have any positive or negative
financial impact for the buyer. The Luxembourg auth
orities also refer to the fairness opinion updated at the
(82) In
conclusion,
the Luxembourg authorities
note that
end of May 2012, which reached the same conclusions.
none of the comments received from third parties is
The sale price for Dexia BIL may therefore be regarded as
such as to call into question the developments set out
a market price, which excludes any transfer of aid.
in their notification and in their comments. The
Luxembourg authorities further note that none of the
comments by third parties is likely to call into question
(76) Finally, the Luxembourg authorities agree with the
the argument that the process of the sale of Dexia BIL
comments by Dexia SA. (section 4 above).
must be regarded, in accordance with the Commission’s
decision-making practice, as an open, transparent and
Observations by the Luxembourg authorities on the comments
non-discriminatory process capable of guaranteeing that
by third parties
the transaction took place at the market price. The

Luxembourg authorities therefore maintain that the
(77) The
Luxembourg authorities take the view that the
transaction took place without any aid.
statements in comment A are based on limited data
and do not fully analyse the situation. In particular,
they do not take account of the exact terms of the trans
6. EXISTENCE OF AID
action. In this regard, the Luxembourg authorities would
refer to the various documents submitted to the
(83) Article
107(1)
TFEU
lays
down
that
‘Save
as
otherwise
Commission by themselves and Dexia SA, in particular
provided in this Treaty, any aid granted by a Member
the fairness opinions by third parties, which conclude
State or through state resources in any form whatsoever
that the price paid is a fair price in the light of the
which distorts or threatens to distort competition by
terms of the transaction. This is clear from the evaluation
favouring certain enterprises or the production of
by a third party dated 10 December 2011 and was
certain goods shall, in so far as it affects trade between
confirmed on 30 May 2012 by the same consultant,
Member States, be incompatible with the internal
namely […].
market’.
(78) Moreover, it is clear from the file in the Commission’s
possession that the Luxembourg State neither offered nor
(84) Dexia
BIL
is
active
at
European
level
and
therefore
clearly
granted guarantees to the buyer.
competes with other foreign market operators. The
Commission therefore takes the view that any potential
aid contained in the sale of Dexia BIL would affect trade
(79) The Luxembourg authorities therefore note that
between Member States and distort or threaten to distort
comment A appears to be based on incomplete
competition.

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EN
28.12.2012 Official
Journal
of
the
European
Union L
357/23
(85) The
Commission,
in
its
Decision
of
26
February
2010,
(90) Following
the
opening
decision,
the
Commission
received
has already established that the aid received by Dexia in
additional information about the evaluation of the
the form of capital, financing guarantees, ELA backed by
market price.
a sovereign guarantee and support for impaired assets
(FSA measure) did constitute state aid (granted by
Belgium, Luxembourg and France). It is therefore
(91) The
Commission
notes
that
the
sale
of
Dexia
BIL
was
necessary to verify that the sold business does not
subject to a first fairness opinion by a third party on
retain the benefit of the aid previously received by Dexia.
10 December 2011, which was updated on 30 May
2012. The evaluations were carried out using three
different methods: (i) discounted cash flows to equity
on the basis of the cash flow distributable to share
(86) According to the judgment of the Court of Justice in
holders, subject to compliance with the Core Tier 1
Italie et SIM 2 v Commission ( 1 ), which the Commission
regulatory ratios; (ii) price-to-book ratio, on the basis
relied on for its decisions in Olympic Airlines ( 2 ) and Alita
of excess profitability in relation to the cost of capital;
lia ( 3 ), examination of the economic continuity between
(iii) comparable listed companies. The first fairness
the old firm and the new structures is based on a
opinion by a third party, dated 10 December 2011,
number of factors. These factors include, in particular,
resulted in a price in a band between EUR [600-700]
the subject of the transfer, the transfer price, and the
and [800-900] million. The updated assessment, dated
identity of the shareholders or owners of the acquiring
30 May 2012, confirms that the assessment took into
firm or the acquired firm. This was reiterated by the
account exactly the scope of the sold businesses and
Court of First Instance in its judgment in Ryanair v
comes to the same conclusions, namely that the fair
Commission ( 4 ), which confirmed the Alitalia decision.
price lies within a range of between EUR [600-700]
and [800-900] million. The Commission has examined
these fairness opinions. It notes that the evaluations are
(87) With regard to the subject of the sale, the scope of the
based on standard methods generally applicable in this
sold businesses is limited to the retail and private
field and take into account the precise conditions and
banking businesses, which do not appear to have been
scope of the transaction.
the cause of the Dexia group’s problems requiring state
aid to be granted. The Commission also notes that the
part of the portfolio of legacy securities held by Dexia
(92) The
price
of
the
transaction,
EUR
730
million,
lies
within
BIL, which was linked to the group’s refinancing
the range of the fairness opinions. There is therefore no
problems that contributed to the need for state aid auth
indication that the price paid is below or above the
orised by the Decision of 26 February 2010, is not
market price. The sale price for Dexia BIL may
included in the sold businesses. From a quantitative
therefore be regarded as a market price, which also
perspective, the scope of the sold businesses accounts
excludes any transfer on the sale of any potential aid
for approximately 60 % of Dexia BIL’s balance-sheet
previously granted to Dexia.
total and [0-10] % of the Dexia group’s balance-sheet
total.
(93) Certain
of
Dexia
BIL’s
activities
are
excluded
from
the
scope of the sale (recital (36)). These activities will be
transferred to Dexia before the transaction is completed,
(88) There is no link between the private buyer Precision
with a clause for the recovery of the net proceeds from
Capital and the current shareholders in Dexia SA,
the transfers by Dexia BIL. The Commission notes that
which therefore means that the private buyer is inde
the additional information received subsequent to the
pendent in relation to Dexia SA when it takes
opening decision confirms that the valuation of the
decisions and implements its strategy in relation to the
activities excluded from the transaction has no bearing
sold businesses of Dexia BIL.
on establishing the market price. The sale price is based
on a Common Equity Tier 1 capital ratio under Basel III
of exactly 9 % at the time the sale is completed. If there
(89) Moreover, an acquisition at the market price for the sold
is a difference between this level and the level of capital
businesses would ensure that the buyer pays an adequate
when the transfer is completed, the adjustment clause
price for the aid which this part of Dexia BIL could have
guarantees that the difference will be repaid by the
benefited from as a company in the Dexia group and that
buyers or the seller and/or that the sale price will be
the transaction price for the sale of Dexia BIL does not,
adjusted. The valuation of shareholdings or assets
therefore, contain any aid.
excluded from the scope of the transaction should not,
therefore, be taken into account when establishing the
market price. The adjustment clause was also taken into
( 1 ) Joined Cases C-328/99 and C-399/00 [2003] ECR I-4035.
account in the fairness opinions.
( 2 ) Commission Decision of 17 September 2008, State Aid
N 321/2008, N 322/2008 and N 323/2008 – Greece – Sale of
certain assets of Olympic Airlines/Olympic Airways Services. OJ
C 18, 23.1.2010, p. 9. Judgment in Joined Cases T-415/05,
(94) In
the
opening
decision,
the
Commission
noted
that
the
T-416/05 and T-423/05 Olympic Airlines v Commission, paragraph
Luxembourg State was participating in the sale of Dexia
135.
BIL as a buyer of a 10 % holding under the same
( 3 ) Commission Decision of 12 November 2008, State Aid
conditions as Precision Capital. It is clear, therefore,
N 510/2008. Sale of assets of the airline Alitalia, OJ C 46,
that the holding by Luxembourg involves state resources.
25.2.2009, p. 6.
( 4 ) Case T-123/09 Ryanair v Commission, paragraphs 155 and 156, not
Given that Luxembourg is participating on the same
yet reported.
conditions as Precision Capital, the Commission takes

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L 357/24
EN
Official Journal of the European Union
28.12.2012
the view that in principle Luxembourg is acting as a
not constitute aid within the meaning of Article 107(1)
private investor, which excludes any aid in relation to
TFEU. In particular, it does not constitute new aid for
Luxembourg's 10 % holding.
Dexia SA or for Dexia BIL,
HAS ADOPTED THIS DECISION:
(95) In the opening decision, the Commission also noted that
Precision Capital and the Luxembourg State planned to
Article 1
remove clause 3.3.5. The Commission has noted that
under this clause, Dexia SA would undertake to obtain
The measure comprising the sale of Dexia BIL does not
sovereign guarantees in favour of the buyer of Dexia BIL.
constitute aid within the meaning of Article 107(1) of the
Activation of the clause would potentially call on state
Treaty on the Functioning of the European Union.
resources in the form of guarantees. Moreover, the very
existence of the clause would be likely to grant benefits
Implementation of the measure is therefore authorised.
to the buyer of Dexia BIL. Following the opening
decision, the Commission received additional information
Article 2
confirming that clause 3.3.5 had not been included in
the final share purchase contracts that replaced the MoU.
This Decision is addressed to the Grand Duchy of Luxembourg.
The Commission therefore concludes that, since the
clause was not implemented and has been abandoned,
there is no aid in this regard.
Done at Brussels, 25 July 2012.
7. CONCLUSION
For the Commission
(96) For the reasons set out above, the Commission concludes
Joaquín ALMUNIA
that the measure comprising the sale of Dexia BIL does
Vice-President

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Document Outline

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