EU opens probe into sale of Dexia bank unit in Luxembourg

The European Commission said on Tuesday it had opened an in-depth investigation into the sale of the Luxembourg unit of fallen Franco-Belgian bank Dexia to an investor linked to the Qatari royal family.

The Commission said the probe aims to wether the sale of Dexia BIL “is conducted on market conditions and therefore does not contain any state aid element.”

Following the dismantling of Dexia, investors linked to Qatar’s royal family agreed to buy 90 percent of Dexia BIL, the bank’s Luxembourg unit.

The transaction, mostly for Dexia BIL’s retail and private banking businesses, also involves the state of Luxembourg acquiring a 10 percent for 100 million euros.

“Given that the proposed sale is the result of exclusive negotiations with one private investor … the Commission has opened an in-depth investigation to assess whether the price of the transaction” is in line with its market valuation, it said in a statement.

The Commission added it “does not have enough information on the valuation of the carved-out businesses at this stage”.

The Commission said an in-depth investigation gives interested third parties the possibility to submit comments on the sale and increases legal certainty.

First bailed out in 2008 at the height of the global financial crisis, Dexia could not cope with the turmoil of the eurozone debt quagmire and in October, France, Belgium and Luxembourg stepped in to wind up the bank.