Under the deal, La Caisse des Depots et Consignations, or CDC, would hand over its 41 percent stake in CNP Assurances in exchange for a stake in La Poste, which already owns a bank.

La Poste will then merge its bank, La Banque Postale, with CNP Assurances to expand the range of services it provides.

The French government, which owns both CDC and La Poste, wants to build up a state-owned company that would provide both banking and insurance services in the country’s rural areas which are often neglected by private rivals.

“You can see that there is an absolute necessity to reinvent La Poste’s business,” Finance Minister Bruno Le Maire said at a news conference to announce the deal, adding that postal services were declining 7 percent a year and losing 560 million euros ($654.58 million) a year in revenue.

%d bloggers like this: