Ruling allows French banks to merge

France’s highest court removed the final regulatory hurdle to Credit Agricole SA’s planned merger with Credit Lyonnais SA, a deal to create the country’s largest retail bank.

Ending five months of wrangling on the deal, the Council of State confirmed approval of the €19.5bn merger, but turned away conditions imposed by France’s main banking regulator.

In its verdict, the court ruled that the regulator, CECEI, had the right to approve the merger, but had overstepped its bounds by imposing conditions on it.

The ruling allows Credit Agricole’s planned merger with Credit Lyonnais, the biggest tie-up in French banking for four years, to go ahead later this month.